GOVERNMENT TAKES AIM AT STANDARD TAX
PLANNING USING PRIVATE CORPORATIONS

With PROPER PLANNING, leave more money for your family and less in the government’s hands

Tax Grab

Death and taxes — while the first is unavoidable, the second can be detoured with an incredibly simple plan to avoid the outrageous tax bill that will be slapped on your hard-earned money. 

Upon your death, your children could be hit with a tax of more than 70 per cent before they have cash in their hands. That’s 70 per cent of your estate’s total net worth going to government coffers and only 30 per cent left for your family.

What is even more outrageous is the Government of Canada’s new plan to not just tax your estate 70 per cent but to create so-called “tax fairness” by eliminating commonly used tax planning for small-to-mid-sized business owners, leaving nothing but a massive double-digit tax increase in its wake.

These offensive increases will hit dentists, lawyers and all other professional practice owners immeasurably — in other words, the heart of Canada’s middle class will take a beating. The plan will put an end to income splitting between family members, substantially increase the tax rate on passive investments and income earned inside a corporation and eliminate the conversion of a corporation’s ordinary income into tax-preferred capital gains. 

More of your hard-earned money will be taken away. 

Feel like paying a tax bill of over $3.5 million on a business with a FMV of $5 million after paying millions in taxes during your lifetime?

Life insurance becomes your greatest tax deferral strategy

The proposals relating to taxing passive investments target passive income earned in a corporation and not the passive asset itself. Accordingly, since life insurance does not produce taxable income these rules should not affect corporate-owned life insurance. As it stands today, the proposals do not impact the tax advantages of corporate-owned life insurance and in fact further reinforce that insurance should be utilized as a primary tool for family, tax and estate planning. 

Yet, when most people think of life insurance, death and financially protecting loved ones is what comes to mind — not asset protection and estate tax deference. But life insurance will protect your family and protect your money all at the same time. 

A creatively structured cash value life insurance policy allows you to make both dividends and shelter your profits from this so-called tax-fairness plan.

Protecting your family while cultivating your future prosperity

An investment in permanent life insurance combines the immediate benefit of lifetime protection and tax-advantaged savings with dividend earnings potential. 

Avoid the taxman. An investment in life insurance shelters your cash and investment growth from both tax and future tax.

Cultivate future wealth. A life insurance policy creates a corporately owned, tax-free retirement vehicle with greater benefits than a traditional RRSP.

Enhance yield. A permanent life insurance policy provides tax-free access to your own money to self-finance your own business as you grow.

Transform your legacy. Life insurance ensures that the dividend tax on death is covered through the proceeds of the policy and the existing Capital Dividend Account (CDA).

No other financial instrument exists in Canada that can provide this level of estate protection from the taxman. And protection is a must, because no one wants to hand over one cent more than necessary to the government.