6 worked Holding Company Tax 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 holding company tax planning work, not a specific client's file.
Case Study 1 · CRA review defended
$89,000 Reassessment Reduced To Nil On Review — Redundant Subsidiary, Kitchener
The situation — A redundant subsidiary corporation, Kitchener, Ontario
A review notice arrived at a redundant subsidiary corporation in Kitchener, Ontario covering holding company tax planning for two tax years. The auditor's working position was an adjustment of $89,000, driven by a trust still holding capital property with its twenty-one-year deemed disposition inside the planning horizon.
What we did for A redundant subsidiary corporation, Kitchener, Ontario
Rather than negotiate, we rebuilt the record. We filed the short-year T2 for each predecessor corporation, chose the first year-end of the amalgamated corporation deliberately, and carried the predecessor loss balances forward under the continuity rules and submitted a point-by-point response that answered each proposed adjustment with the document behind it.
The result — A redundant subsidiary corporation, Kitchener, Ontario
The auditor accepted the documented position and closed the review without adjustment, protecting $89,000 and leaving the prior filings undisturbed.
Case Study 2 · Backlog brought current
$82,000 Of Arbitrary Assessments Vacated After 4 Years — Owner Separating Surplus Assets, Victoria
Client: An owner separating surplus assets from the operating business · Where: Victoria, British Columbia · Engagement: 8 weeks, fixed fee
Arbitrary tax vacated$82,000
Years brought current4
Account statusCurrent
The situation — An owner separating surplus assets from the operating business, Victoria, British Columbia
4 years of unfiled returns had turned into notional assessments at an owner separating surplus assets from the operating business in Victoria, British Columbia, with a dividend paid up to the holding company with no safe income on hand computed behind it underneath. Collections had already started.
What we did for An owner separating surplus assets from the operating business, Victoria, British Columbia
We filed the section 85 election on form T2057 with the elected amounts set at the cost amounts of the transferred property, keeping the non-share consideration inside those amounts so nothing was realised on the transfer, then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — An owner separating surplus assets from the operating business, Victoria, British Columbia
All 4 years were accepted as filed. $82,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 4 years.
Case Study 3 · Deadline rescue
8-Week Turnaround Beat The Deadline And Saved $101,000 — Investment-Heavy Operating Company, Moncton
Client: An investment-heavy operating company · Where: Moncton, New Brunswick · Engagement: 8 weeks, fixed fee
Late-filing penalty avoided$101,000
Filed with10 days to spare
Next yearPapers ready
The situation — An investment-heavy operating company, Moncton, New Brunswick
With the deadline for holding company tax planning weeks away, an investment-heavy operating company in Moncton, New Brunswick was carrying an inter-company balance and a shareholder loan left outstanding between the corporations being merged. The exposure if the date slipped was around $101,000.
What we did for An investment-heavy operating company, Moncton, New Brunswick
We reviewed the paid-up capital of each class, the capital dividend account and the eligible dividend designations before the final distribution, dissolved the corporation, and requested the clearance certificate. The filing went in complete rather than provisional, so there was no amended return to follow.
The result — An investment-heavy operating company, Moncton, New Brunswick
Filed with 10 days to spare. $101,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Case Study 4 · Planning that cut the bill
Remuneration Review Saved $55,000 Across Corporate And Personal Returns — Parent Winding Up Subsidiary, Kelowna
Client: A parent corporation winding up a dormant subsidiary · Where: Kelowna, British Columbia · Engagement: 8 weeks, fixed fee
Combined saving$55,000
ScopeCorporate + personal
Future yearsNo rework needed
The situation — A parent corporation winding up a dormant subsidiary, Kelowna, British Columbia
Nothing was wrong at a parent corporation winding up a dormant subsidiary in Kelowna, British Columbia — the filings were on time and accurate. What they were not was planned. A freeze completed years earlier with nothing on file to support the value placed on the preferred shares had never been reviewed.
What we did for A parent corporation winding up a dormant subsidiary, Kelowna, British Columbia
We moved the redundant investments out of the operating company into a holding company on a tax-deferred basis, which brought the asset mix back inside the qualified small business corporation tests, 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 parent corporation winding up a dormant subsidiary, Kelowna, British Columbia
$55,000 came off the combined corporate and personal tax bill, and the structure holds for future years without further work.
Case Study 5 · Missed incentive claimed
$60,000 In Credits Claimed That Prior Filings Had Missed — Three-Tier Corporate Group, Lethbridge
Client: A three-tier corporate group · Where: Lethbridge, Alberta · Engagement: 8 weeks, fixed fee
Credits claimed$60,000
Years adjusted4
Review outcomeNo adjustment
The situation — A three-tier corporate group, Lethbridge, Alberta
A three-tier corporate group in Lethbridge, Alberta had been filing for 4 years without ever claiming the incentives its activity qualified for. Behind that sat an inter-company balance and a shareholder loan left outstanding between the corporations being merged.
What we did for A three-tier corporate group, Lethbridge, Alberta
We tested each activity against the eligibility criteria rather than the description on the invoice, then reorganised the share capital under section 86, exchanged the founder common shares for fixed-value redeemable preferred shares, and issued the growth shares to the successors on a valuation the file could support, with a price adjustment clause behind it.
The result — A three-tier corporate group, Lethbridge, Alberta
$60,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 6 · Structure rebuilt
Corporate Structure Rebuilt For $10,500 Of Annual Savings — Two-Subsidiary Holding Company, Calgary
Client: A two-subsidiary holding company · Where: Calgary, Alberta · Engagement: 11 weeks, fixed fee
Saving per year$10,500
DocumentationComplete
Transfer basisRollover
The situation — A two-subsidiary holding company, Calgary, Alberta
The structure at a two-subsidiary holding company in Calgary, Alberta had been set up years earlier for a business that no longer existed, and a rollover completed in an earlier year with no section 85 election ever filed for it had become expensive.
What we did for A two-subsidiary holding company, Calgary, Alberta
We 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, after confirming that subsection 75(2) had never applied to the property. The reorganisation used the rollover provisions rather than a taxable transfer, so no tax fell due on the restructuring itself.
The result — A two-subsidiary holding company, Calgary, Alberta
$10,500 of annual saving, achieved on a tax-deferred basis. The minute book, elections and valuations are all in the file.
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.
