6 Salary Versus Dividend Planning tax and accounting engagements in full — what the client came to us with, what we did, and what it was worth. Each one is specific to salary versus dividend planning work, not a general example.
Client: A technology CCPC approaching its first profitable year · Where: Hamilton, Ontario · Engagement: 11 weeks, fixed fee
Amount recovered$39,000
Reporting statusCurrent
Annual effortHours, not weeks
The situation
Foreign holdings at a technology CCPC approaching its first profitable year in Hamilton, Ontario had passed the reporting threshold without anyone noticing. Behind the disclosure problem sat two corporations under common control filing as if each had its own $500,000 limit.
What we did
We moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down, claiming the treaty relief and foreign tax credits on the Canadian return and correcting the disclosure position for the open years.
The result
The treaty position was accepted and $39,000 was recovered. Reporting is now current and the annual process takes hours rather than weeks.
Case Study 2 · Cash and remittance control
Instalments Rebased, $131,000 Of Cash Returned To The Business — Incorporated Consultancy, Moncton
Client: An incorporated consultancy · Where: Moncton, New Brunswick · Engagement: 10 weeks, fixed fee
Cash returned$131,000
Instalment basisCurrent year
ReviewedQuarterly
The situation
An incorporated consultancy in Moncton, New Brunswick was paying instalments calculated on a prior year that no longer reflected the business. A small business limit quietly shared across three associated corporations nobody had mapped was tying up $131,000 of cash.
What we did
We rebased the instalments on the current-year estimate rather than the prior-year default, and modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year.
The result
$131,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 3 · Deadline rescue
$64,000 Late-Filing Penalty Cancelled On Relief Application — Second-Generation Family Manufacturer, Surrey
Client: A second-generation family manufacturer · Where: Surrey, British Columbia · Engagement: 6 weeks, fixed fee
Penalty cancelled$64,000
Relief applicationGranted
ReturnAccepted as filed
The situation
A second-generation family manufacturer in Surrey, British Columbia had already missed one deadline and was about to miss a second. Behind it sat a balance-due date the owner believed was the same as the filing date, and a penalty of $64,000 was accruing.
What we did
We split the work into what had to happen before the deadline and what could follow it, then rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual.
The result
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $64,000 of the penalty already assessed on the earlier year.
Case Study 4 · Structure rebuilt
Holding Structure Added, $46,000 Saved Annually — Holding Company and Its, Barrie
Client: A holding company and its operating subsidiary · Where: Barrie, Ontario · Engagement: 7 weeks, fixed fee
Annual saving$46,000
ReorganisationTax-neutral
StructureMatches operations
The situation
A holding company and its operating subsidiary in Barrie, Ontario was carrying retained earnings building in the operating company with no plan for extracting them, and every option for fixing it ran through a reorganisation that had to be done without triggering tax.
What we did
Working with the client's lawyer, we mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request and prepared the elections, resolutions and valuations the structure needed to stand up.
The result
The structure now matches the business. Annual saving of $46,000, and the reorganisation itself was tax-neutral.
Case Study 5 · Sale and succession
$755,000 Sheltered By The Lifetime Capital Gains Exemption — Import and Distribution Corporation, Halifax
Client: An import and distribution corporation · Where: Halifax, Nova Scotia · Engagement: 11 weeks, fixed fee
Gain sheltered$755,000
ClosingOn schedule
Share qualificationMet
The situation
An import and distribution corporation in Halifax, Nova Scotia had an offer on the table and 19 months to close. The shares did not qualify for the capital gains exemption, and a minute book with no resolutions behind a decade of dividends was part of the reason.
What we did
We purified the corporation so the shares met the qualifying tests, then moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down well ahead of the closing date.
The result
The sale closed on schedule with $755,000 sheltered by the lifetime capital gains exemption across the shareholders.
Client: An incorporated trades business · Where: Kelowna, British Columbia · Engagement: 10 weeks, fixed fee
Proposed tax cleared$70,000
Review duration10 weeks
OutcomeNo change
The situation
An incorporated trades business in Kelowna, British Columbia was selected for review after two corporations under common control filing as if each had its own $500,000 limit showed up in the CRA's automated matching. The proposed adjustment on salary versus dividend planning came to $70,000.
What we did
We modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result
The review closed with no change. $70,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Reviewed for the 2025 tax year by Udit Gupta, Certified Tax Accountant. Figures describe representative engagements of this type; outcomes depend on your own facts. Client names and identifying details are omitted for confidentiality.
