6 worked Shareholder Compensation 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 shareholder compensation planning work, not a specific client's file.
Case Study 1 · Deadline rescue
6-Week Turnaround Beat The Deadline And Saved $106,000 — Associated Corporation Pair, Surrey
Client: A corporation associated with a spouse-owned company · Where: Surrey, British Columbia · Engagement: 6 weeks, fixed fee
Late-filing penalty avoided$106,000
Filed with20 days to spare
Next yearPapers ready
The situation — A corporation associated with a spouse-owned company, Surrey, British Columbia
A corporation associated with a spouse-owned company in Surrey, British Columbia was weeks away from the deadline for shareholder compensation planning. Behind that sat a distribution treated as tax-free capital dividend with no election ever filed. The exposure if the date slipped was around $106,000.
What we did for A corporation associated with a spouse-owned company, Surrey, British Columbia
We documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain. The filing went in complete rather than provisional, so there was no amended return to follow.
The result — A corporation associated with a spouse-owned company, Surrey, British Columbia
Filed with 20 days to spare. $106,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Case Study 2 · Records and systems rebuilt
25 Months Reconciled And $3,300 Of Input Tax Recovered — Holding and Operating Companies, Lethbridge
Client: A holding company and its operating subsidiary · Where: Lethbridge, Alberta · Engagement: 8 weeks, fixed fee
Months reconciled25
Input tax recovered$3,300
Close time5 days
The situation — A holding company and its operating subsidiary, Lethbridge, Alberta
Nothing reconciled at a holding company and its operating subsidiary in Lethbridge, Alberta. Every filing started with 25 months of cleanup. The file was carrying a small business limit quietly shared across three associated corporations nobody had mapped.
What we did for A holding company and its operating subsidiary, Lethbridge, Alberta
We rebuilt from source rather than correcting on top of the existing file. We rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual. Then we set the routine that keeps it clean.
The result — A holding company and its operating subsidiary, Lethbridge, Alberta
25 months reconciled to the bank. The close now takes 5 days, and $3,300 of previously unclaimable input tax was recovered in the process.
Case Study 3 · Cash and remittance control
Instalments Rebased, $63,000 Of Cash Returned To The Business — Corporate Rental Portfolio, Regina
The situation — A corporately-owned rental portfolio, Regina, Saskatchewan
A corporately-owned rental portfolio in Regina, Saskatchewan was paying instalments calculated on a prior year. That year no longer reflected the business. A balance-due date the owner believed was the same as the filing date was tying up $63,000 of cash.
What we did for A corporately-owned rental portfolio, Regina, Saskatchewan
We rebased the instalments on the current-year estimate rather than the prior-year default. Alongside that, 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.
The result — A corporately-owned rental portfolio, Regina, Saskatchewan
$63,000 of cash stayed in the business, the penalty cycle ended, and the instalment position is reviewed each quarter against actual results.
Case Study 4 · Planning that cut the bill
$45,000 Cut From The Annual Tax Bill — Corporation Holding Investments, Ottawa
Client: An operating company holding surplus investments · Where: Ottawa, Ontario · Engagement: 7 weeks, fixed fee
First-year saving$45,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation — An operating company holding surplus investments, Ottawa, Ontario
An operating company holding surplus investments in Ottawa, Ontario was compliant but paying more than it needed to. The prior year had been filed correctly. It still left retained earnings building in the operating company with no plan for extracting them on the table.
What we did for An operating company holding surplus investments, Ottawa, Ontario
We modelled the current position against the alternatives before changing anything. Then we modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year.
The result — An operating company holding surplus investments, Ottawa, Ontario
The change saved $45,000 in the first year and repeats annually. Nothing about the filings became more aggressive. The position is simply the one the rules already allowed.
Case Study 5 · Scaling without breaking
Second-Province Expansion Handled, $139,000 Of Cash Released — Professional Corporation, Barrie
Client: A professional corporation · Where: Barrie, Ontario · Engagement: 6 weeks, fixed fee
Cash released$139,000
New registrationsComplete on day one
Compliance gapsNone
The situation — A professional corporation, Barrie, Ontario
Revenue at a professional corporation in Barrie, Ontario was up sharply and cash was tighter than ever. Underneath it sat dividends moved up to a holding company year after year with no safe-income support on file.
What we did for A professional corporation, Barrie, Ontario
We mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request. Every new obligation was set up before it was triggered, not after. That covered registration, remittance frequency and provincial filing.
The result — A professional corporation, Barrie, Ontario
$139,000 of cash was released from the working capital cycle. The expansion completed with every registration and filing obligation covered from day one.
Case Study 6 · CRA review defended
Audit Defence Closed In 7 Weeks, $139,000 Cleared — First-Profit Technology CCPC, London
Client: A technology CCPC approaching its first profitable year · Where: London, Ontario · Engagement: 7 weeks, fixed fee
Proposed tax cleared$139,000
Review duration7 weeks
OutcomeNo change
The situation — A technology CCPC approaching its first profitable year, London, Ontario
A technology CCPC approaching its first profitable year in London, Ontario was selected for review. Passive investment income that had crossed the $50,000 grind threshold unnoticed had shown up in the CRA's automated matching. The proposed adjustment on shareholder compensation planning came to $139,000.
What we did for A technology CCPC approaching its first profitable year, London, Ontario
We carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result — A technology CCPC approaching its first profitable year, London, Ontario
The review closed with no change. $139,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
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.
