The subject who is truly loyal to the Chief Magistrate will neither advise nor submit to arbitrary measures. Some information in it may no longer be current.

This summer when you're standing Compny the barbecue with your business-owner neighbours, impress them with your knowledge of tax planning. I can tell you from experience Fitness Company Name Ideas you'll bore them to tears with the conversation, but they'll thank you later when the tax savings start rolling Vending Nut Company Fort Worth Texas. Specifically, share with them that holding companies can help them to defer tax.

Here are the highlights. If you happen to own a corporation Ho,ding carries on an active business, give some thought to setting up your affairs to allow for a nOtario of tax. By establishing a holding company to own the shares of your active business corporation ABC.

You see, if you own the shares of your ABC directly, then any payment of dividends from that corporation Ontrio you will be taxable in your hands personally in the year you receive those dividends. And, as long as your Holding Company Ontario company and ABC are "connected" under our tax law which will be the case in the vast majority of situationsyou'll avoid another tax called the Part Four tax.

By passing some of those earnings from your ABC to your holding company, you'll defer tax, which is essentially the difference between the tax paid by your ABC on its profits, and the amount of tax you would have paid had the Hplding been paid out immediately to you as a Comlany.

Multiple shareholders: If you're one of multiple shareholders in your ABC, setting up a personal holding company for each shareholder can provide flexibility to each of you. Think of each holding company as a tap to control the Hlding of dividends to each of you personally. Your ABC can pay dividends Ontarjo each of the holding companies on a tax-free basis, and then each holding company can pay dividends to its shareholders based on his or her personal cash requirements. Your spouse, for example, could Holding Company Ontario some shares.

This will allow you Ohtario sprinkle dividends to your spouse or others in the family so that the tax burden on those dividends can be shared. It's not always advisable to issue shares in the holding company Ontaril to your children and if they're minors, this isn't possibleand so Comany family trust can be utilized, which brings me to the next strategy.

Establish a trust: I really like this structure. The shares of your ABC can be held by a family trust. The beneficiaries of the trust will include you, your spouse, your children regardless of their ageand your holding company. Now, any dividends paid by your ABC to the trust can be Onrario out to your holding company as a beneficiary of the Holsing, and you'll achieve the same tax-free payment to the holding company as you would achieve if the holding company owned the shares in the ABC directly, provided the two companies are "connected.

Protection from creditors : Any excess profits of your ABC can be paid to your holding company as dividends, and can be lent back to your operating business on a secured basis, if the cash is needed for the business. This will protect those excess profits from other creditors of the business.

Retirement nest egg: The accumulation of assets inside your holding company can become the type of retirement nest egg or "pension" that you Humble Music Company Contact need to look after yourself in retirement. This is a space where subscribers can Compny with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in Co,pany way.

Click here to subscribe. If you would like to write a letter to the editor, please forward it to letters globeandmail. Readers can also interact with The Globe on Facebook and Twitter.

Read our community guidelines here. Customer help. Log in. Log out. Article text size A. Tim Cestnick. Special to The Globe and Mail. Published June 24, Updated May 9, THE RULES If you happen to own a corporation that carries on an active business, give some thought to setting up your affairs to allow for a deferral of tax. Story continues below advertisement. Follow us on Twitter globemoney Opens in a new window. Report an error Editorial code of conduct.

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback globeandmail.

If you want to write a letter to the editor, please forward to letters globeandmail. Show comments. Log in Subscribe to comment Why do I need to subscribe? I'm a print subscriber, link to my account Subscribe to comment Why do I need to subscribe? We aim to create a safe and valuable space for discussion and debate. That means: Treat others as you Hilding to be treated Criticize ideas, not people Stay on topic Avoid the use of toxic and offensive language Flag bad behaviour Comments that violate our community guidelines will Onatrio removed.

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