6 worked Trust Wind-Up Tax Assistance 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 trust wind-up tax assistance work, not a specific client's file.
Client: An owner separating surplus assets from the operating business · Where: Barrie, Ontario · Engagement: 4 weeks, fixed fee
Penalty cancelled$135,000
Relief applicationGranted
ReturnAccepted as filed
The situation — An owner separating surplus assets from the operating business, Barrie, Ontario
An owner separating surplus assets from the operating business in Barrie, Ontario had already missed one deadline and was about to miss a second. Behind it sat an investment portfolio accumulating inside the operating company, putting the qualified small business corporation tests at risk. A penalty of $135,000 was accruing.
What we did for An owner separating surplus assets from the operating business, Barrie, Ontario
We split the work into what had to happen before the deadline and what could follow it. Then 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.
The result — An owner separating surplus assets from the operating business, Barrie, Ontario
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $135,000 of the penalty already assessed on the earlier year.
Case Study 2 · Records and systems rebuilt
Books Rebuilt From Source, $16,000 In Unclaimed Input Tax Found — Jointly Owned Rental Corporation, Burnaby
Client: A jointly owned rental-property corporation · Where: Burnaby, British Columbia · Engagement: 6 weeks, fixed fee
Unclaimed tax found$16,000
Records rebuilt33 months
ProcessDocumented
The situation — A jointly owned rental-property corporation, Burnaby, British Columbia
A jointly owned rental-property corporation in Burnaby, British Columbia could not answer basic questions about its own numbers. A capital dividend account balance that would have been lost on dissolution had the final distribution gone ahead as planned sat between the bank statements and the ledger.
What we did for A jointly owned rental-property corporation, Burnaby, British Columbia
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. We then documented the process so the work does not depend on any one person remembering how it was done.
The result — A jointly owned rental-property corporation, Burnaby, British Columbia
Records rebuilt and reconciled, $16,000 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 3 · Cash and remittance control
$29,000 Of Working Capital Freed From The Tax Cycle — Incorporating Sole Proprietor, Edmonton
Client: An incorporating sole proprietor · Where: Edmonton, Alberta · Engagement: 9 weeks, fixed fee
Working capital freed$29,000
On-time remittancesEvery period since
Forecast horizon13 weeks
The situation — An incorporating sole proprietor, Edmonton, Alberta
An incorporating sole proprietor in Edmonton, Alberta was profitable on paper and short of cash every month. All future growth accruing to shares the founder already held, with no freeze in place explained most of the gap.
What we did for An incorporating sole proprietor, Edmonton, Alberta
We cleared the inter-company balances and the shareholder loan before the reorganisation closed. We papered each step with the resolutions and agreements the structure has to rest on. We also built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result — An incorporating sole proprietor, Edmonton, Alberta
$29,000 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 · Planning that cut the bill
$26,500 Saved By Correcting What Prior Filings Had Missed — Two-Subsidiary Holding Company, Kelowna
Client: A two-subsidiary holding company · Where: Kelowna, British Columbia · Engagement: 6 weeks, fixed fee
Saving identified$26,500
RecurringYes
Positions documentedAll
The situation — A two-subsidiary holding company, Kelowna, British Columbia
A two-subsidiary holding company in Kelowna, British Columbia asked for a second opinion on trust wind-up tax assistance. That followed three years of rising tax. The review found a trust still holding capital property with its twenty-one-year deemed disposition inside the planning horizon.
What we did for A two-subsidiary holding company, Kelowna, British Columbia
We built the comparison first: current structure against two alternatives. Then we filed the short-year T2 for each predecessor corporation and chose the first year-end of the amalgamated corporation deliberately. We carried the predecessor loss balances forward under the continuity rules.
The result — A two-subsidiary holding company, Kelowna, British Columbia
First-year saving of $26,500, with the same benefit recurring. Every position taken is documented and supported in the file.
Case Study 5 · Scaling without breaking
Second-Province Expansion Handled, $137,000 Of Cash Released — Share Exchange Shareholder, Brampton
Client: A shareholder exchanging common shares for preferred shares · Where: Brampton, Ontario · Engagement: 9 weeks, fixed fee
Cash released$137,000
New registrationsComplete on day one
Compliance gapsNone
The situation — A shareholder exchanging common shares for preferred shares, Brampton, Ontario
Revenue at a shareholder exchanging common shares for preferred shares in Brampton, Ontario was up sharply and cash was tighter than ever. Underneath it sat an inter-company balance and a shareholder loan left outstanding between the corporations being merged.
What we did for A shareholder exchanging common shares for preferred shares, Brampton, Ontario
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. Every new obligation was set up before it was triggered, not after. That covered registration, remittance frequency and provincial filing.
The result — A shareholder exchanging common shares for preferred shares, Brampton, Ontario
$137,000 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
$143,000 Proposed Adjustment Withdrawn In Full — Investment-Heavy Operating Company, Ottawa
Client: An investment-heavy operating company · Where: Ottawa, Ontario · Engagement: 7 weeks, fixed fee
Adjustment withdrawn$143,000
File closed in7 weeks
Penalties assessedNone
The situation — An investment-heavy operating company, Ottawa, Ontario
An investment-heavy operating company in Ottawa, Ontario received a proposal letter opening a review of trust wind-up tax assistance. The CRA had identified a dividend paid up to the holding company with no safe income on hand computed behind it. It proposed an adjustment of $143,000, with 30 days to respond.
What we did for An investment-heavy operating company, Ottawa, Ontario
We treated the response as an evidence exercise rather than an argument. 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. We then indexed every supporting document against the specific line the auditor had questioned.
The result — An investment-heavy operating company, Ottawa, Ontario
The proposed adjustment was withdrawn in full — all $143,000 of it. The file closed in 7 weeks with no change to the assessed amounts and no penalty.
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.
