6 worked Capital Gains Exemption Planning case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to capital gains exemption planning work, not a specific client's file.
Case Study 1 · Scaling without breaking
Growth Handled Without A Missed Filing, $55,000 Freed — Holding and Operating Companies, Kelowna
Client: A holding company and its operating subsidiary · Where: Kelowna, British Columbia · Engagement: 9 weeks, fixed fee
Cash freed$55,000
Compliance failuresNone
ReportingMonthly
The situation — A holding company and its operating subsidiary, Kelowna, British Columbia
A holding company and its operating subsidiary in Kelowna, British Columbia was opening in a second province — different filing obligations, a different payroll regime, and two corporations under common control filing as if each had its own $500,000 limit already in the file.
What we did for A holding company and its operating subsidiary, Kelowna, British Columbia
We modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year and put monthly reporting in place so the owner could see the cash effect of growth while there was still time to act on it.
The result — A holding company and its operating subsidiary, Kelowna, British Columbia
Growth was absorbed without a compliance failure. $55,000 of cash was released, and the monthly reporting now flags a problem while it is still small.
Case Study 2 · Planning that cut the bill
Remuneration Review Saved $46,000 Across Corporate And Personal Returns — Three-Location Franchisee, Victoria
Client: A franchise operator with three locations · Where: Victoria, British Columbia · Engagement: 3 weeks, fixed fee
Combined saving$46,000
ScopeCorporate + personal
Future yearsNo rework needed
The situation — A franchise operator with three locations, Victoria, British Columbia
Nothing was wrong at a franchise operator with three locations in Victoria, British Columbia — the filings were on time and accurate. What they were not was planned. A balance-due date the owner believed was the same as the filing date had never been reviewed.
What we did for A franchise operator with three locations, Victoria, British Columbia
We reconstructed the capital dividend account from the underlying transactions and filed the subsection 83(2) election before the next distribution left the company, and ran the numbers across both the corporate and personal returns so the saving was real rather than deferred into someone else's hands.
The result — A franchise operator with three locations, Victoria, British Columbia
$46,000 came off the combined corporate and personal tax bill, and the structure holds for future years without further work.
Case Study 3 · Cash and remittance control
$124,000 Of Working Capital Freed From The Tax Cycle — First-Profit Technology CCPC, Brampton
Client: A technology CCPC approaching its first profitable year · Where: Brampton, Ontario · Engagement: 3 weeks, fixed fee
Working capital freed$124,000
On-time remittancesEvery period since
Forecast horizon13 weeks
The situation — A technology CCPC approaching its first profitable year, Brampton, Ontario
A technology CCPC approaching its first profitable year in Brampton, Ontario was profitable on paper and short of cash every month. Passive investment income that had crossed the $50,000 grind threshold unnoticed explained most of the gap.
What we did for A technology CCPC approaching its first profitable year, Brampton, Ontario
We reviewed each capital cost allowance pool and set the claim at the level that kept the small business deduction fully used rather than wasted and built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result — A technology CCPC approaching its first profitable year, Brampton, Ontario
$124,000 was released back into working capital. Remittances have been on time every period since, and the forecast shows the tax outflow before it lands.
Case Study 4 · Records and systems rebuilt
22 Months Reconciled And $13,500 Of Input Tax Recovered — Associated Corporation Pair, Halifax
Client: A corporation associated with a spouse-owned company · Where: Halifax, Nova Scotia · Engagement: 11 weeks, fixed fee
Months reconciled22
Input tax recovered$13,500
Close time5 days
The situation — A corporation associated with a spouse-owned company, Halifax, Nova Scotia
A corporation associated with a spouse-owned company in Halifax, Nova Scotia was carrying a small business limit quietly shared across three associated corporations nobody had mapped. Nothing reconciled, and every filing started with 22 months of cleanup.
What we did for A corporation associated with a spouse-owned company, Halifax, Nova Scotia
We rebuilt from source rather than correcting on top of the existing file. We moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down, then set the routine that keeps it clean.
The result — A corporation associated with a spouse-owned company, Halifax, Nova Scotia
22 months reconciled to the bank. The close now takes 5 days, and $13,500 of previously unclaimable input tax was recovered in the process.
Client: A corporation with a non-calendar fiscal year-end · Where: Ottawa, Ontario · Engagement: 6 weeks, fixed fee
Penalty cancelled$87,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
A corporation with a non-calendar fiscal year-end in Ottawa, Ontario had already missed one deadline and was about to miss a second. Behind it sat dividends moved up to a holding company year after year with no safe-income support on file, and a penalty of $87,000 was accruing.
What we did for A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
We split the work into what had to happen before the deadline and what could follow it, then carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance.
The result — A corporation with a non-calendar fiscal year-end, Ottawa, Ontario
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $87,000 of the penalty already assessed on the earlier year.
Case Study 6 · Objection and relief
$139,000 Of Penalties And Interest Cancelled On Relief — Professional Corporation, Calgary
Client: A professional corporation · Where: Calgary, Alberta · Engagement: 11 weeks, fixed fee
Penalties and interest cancelled$139,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — A professional corporation, Calgary, Alberta
An assessment of $139,000 landed at a professional corporation in Calgary, Alberta following a desk review. The auditor had not seen the records behind a distribution treated as tax-free capital dividend with no election ever filed.
What we did for A professional corporation, Calgary, Alberta
We documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain, then set out the legislative basis for the position alongside the documents supporting it.
The result — A professional corporation, Calgary, Alberta
$139,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
