An owner sold their company. We qualified the shares and sheltered $890,000 of the gain with the lifetime capital gains exemption.
A business owner was selling their company and expected a large taxable gain. We purified the corporation to meet the qualifying small business corporation tests and structured the sale as a share sale. The lifetime capital gains exemption sheltered roughly $890,000 of the gain from tax.
Planning has to be in place before the transaction. The salary-versus-dividend mix, the timing of a capital purchase and the choice of year-end all change the outcome, but only prospectively.
Why it bites: Almost every planning opportunity we see missed was available and simply not taken in time; very few are recoverable after year-end.
The first fiscal year-end must fall within 53 weeks of incorporation and sets every filing deadline that follows. Share structure decided at incorporation governs who can receive dividends later.
Why it bites: Year-one choices are cheap to make and expensive to undo. Restructuring share classes after value has accrued triggers its own tax consequences.
Every engagement above was priced as a fixed fee agreed before the work started, and paid only once the client had reviewed the result. If any of this looks like your situation, the first step is a free 15-minute call — we will tell you plainly whether there is anything worth doing.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. This case study is based on a real client engagement handled by Tax Filings Canada; the client's name and identifying details have been changed. Outcomes depend on your own facts.
Sources. CRA — Businesses · Income Tax Act (Justice Laws Website)
