6 worked Estate Freeze 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 estate freeze planning work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$103,000 In Credits Claimed That Prior Filings Had Missed — Owner Separating Surplus Assets, Toronto
Client: An owner separating surplus assets from the operating business · Where: Toronto, Ontario · Engagement: 5 weeks, fixed fee
Credits claimed$103,000
Years adjusted6
Review outcomeNo adjustment
The situation — An owner separating surplus assets from the operating business, Toronto, Ontario
An owner separating surplus assets from the operating business in Toronto, Ontario had been filing for 6 years. In that time, the incentives its activity qualified for were never claimed. Behind that sat no final T2 filed for the predecessor corporations for the short year that ended at the amalgamation.
What we did for An owner separating surplus assets from the operating business, Toronto, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice. Then we reviewed the paid-up capital of each class, the capital dividend account and the eligible dividend designations before the final distribution. We dissolved the corporation and requested the clearance certificate.
The result — An owner separating surplus assets from the operating business, Toronto, Ontario
$103,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 2 · Sale and succession
Intergenerational Transfer Completed With $325,000 Deferred — Incorporating Sole Proprietor, Red Deer
Client: An incorporating sole proprietor · Where: Red Deer, Alberta · Engagement: 3 weeks, fixed fee
Tax deferred$325,000
TransferCompleted
RecordsReview-ready
The situation — An incorporating sole proprietor, Red Deer, Alberta
A generational transfer at an incorporating sole proprietor in Red Deer, Alberta had been discussed for years without a plan. No valuation on file to support the price the parties had agreed meant the transfer as contemplated would have been fully taxable.
What we did for An incorporating sole proprietor, Red Deer, Alberta
We moved the redundant investments out of the operating company into a holding company on a tax-deferred basis. That brought the asset mix back inside the qualified small business corporation tests. We sequenced the steps so each one was complete and documented before the next depended on it.
The result — An incorporating sole proprietor, Red Deer, Alberta
$325,000 of tax was deferred through the transfer, and the successor generation took over a corporation whose records stood up to review.
Case Study 3 · Backlog brought current
Collections Halted And $33,000 Cut From A 6-Year Backlog — Share Exchange Shareholder, Surrey
Client: A shareholder exchanging common shares for preferred shares · Where: Surrey, British Columbia · Engagement: 10 weeks, fixed fee
Balance reduced by$33,000
Backlog cleared6 years
CollectionsHalted
The situation — A shareholder exchanging common shares for preferred shares, Surrey, British Columbia
By the time a shareholder exchanging common shares for preferred shares in Surrey, British Columbia called, 6 years were outstanding. The CRA had assessed on estimates. Underneath it sat an investment portfolio accumulating inside the operating company, putting the qualified small business corporation tests at risk.
What we did for A shareholder exchanging common shares for preferred shares, Surrey, British Columbia
We reconstructed the records year by year. We computed safe income on hand share by share before any dividend was declared, and sized the dividend so subsection 55(2) had nothing to recharacterise. Each filing replaced an arbitrary assessment with a real one.
The result — A shareholder exchanging common shares for preferred shares, Surrey, British Columbia
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $33,000, and a relief application addressed part of the accumulated interest.
Case Study 4 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $37,000 Saved Each Year — Discretionary Family Trust, Calgary
Client: A discretionary family trust · Where: Calgary, Alberta · Engagement: 4 weeks, fixed fee
Annual saving$37,000
Tax on reorganisationDeferred
Elections filedOn time
The situation — A discretionary family trust, Calgary, Alberta
A discretionary family trust in Calgary, Alberta had outgrown the structure it started with. A dividend paid up to the holding company with no safe income on hand computed behind it was the immediate problem. The longer-term one was that the structure blocked the next step.
What we did for A discretionary family trust, Calgary, Alberta
We mapped the current structure and modelled the target. Then we filed the section 85 election on form T2057 with the elected amounts set at the cost amounts of the transferred property. We kept the non-share consideration inside those amounts, so nothing was realised on the transfer. The tax-deferred elections were filed on time and the supporting valuations documented.
The result — A discretionary family trust, Calgary, Alberta
The reorganisation completed without triggering tax, and the new structure saves approximately $37,000 a year while removing the exposure the old one carried.
Case Study 5 · Objection and relief
Desk-Review Assessment Of $98,000 Vacated — Jointly Owned Rental Corporation, Victoria
Client: A jointly owned rental-property corporation · Where: Victoria, British Columbia · Engagement: 3 weeks, fixed fee
Assessment vacated$98,000
Supporting recordsNow on file
AccountCleared
The situation — A jointly owned rental-property corporation, Victoria, British Columbia
A jointly owned rental-property corporation in Victoria, British Columbia was carrying $98,000 of penalties and interest. The charges arose from a rollover completed in an earlier year with no section 85 election ever filed for it. Much of that amount accumulated during a period the CRA itself had delayed.
What we did for A jointly owned rental-property corporation, Victoria, British Columbia
We confirmed that subsection 75(2) had never applied to the property. We then distributed the capital property of the trust to the resident capital beneficiaries on a subsection 107(2) rollover ahead of the twenty-one-year date. We framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A jointly owned rental-property corporation, Victoria, British Columbia
The assessment was vacated. $98,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 6 · Deadline rescue
5-Week Turnaround Beat The Deadline And Saved $142,000 — Two-Subsidiary Holding Company, Halifax
Client: A two-subsidiary holding company · Where: Halifax, Nova Scotia · Engagement: 5 weeks, fixed fee
Late-filing penalty avoided$142,000
Filed with9 days to spare
Next yearPapers ready
The situation — A two-subsidiary holding company, Halifax, Nova Scotia
A two-subsidiary holding company in Halifax, Nova Scotia was weeks away from the deadline for estate freeze planning. Behind that sat a capital dividend account balance that would have been lost on dissolution had the final distribution gone ahead as planned. The exposure if the date slipped was around $142,000.
What we did for A two-subsidiary holding company, Halifax, Nova Scotia
We wound the subsidiary up into its parent under subsection 88(1) and moved the property across at its cost amounts. We closed the subsidiary program accounts once the final return had been assessed. The filing went in complete rather than provisional, so there was no amended return to follow.
The result — A two-subsidiary holding company, Halifax, Nova Scotia
Filed with 9 days to spare. $142,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. 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.
