Getting money out of your corporation can be expensive.
Shareholders of Canadian-controlled private corporations (CCPCs) face high combined corporate and personal rates on distributed profits. The structure gives shareholders a lower-cost way to get money out of the corporation and into their hands personally.
Who this is for
You own a CCPC; Opco, Holdco, or both, with high income and/or retained earnings you’d rather have in your hands than on the balance sheet. You’ve already used the obvious levers. Salary and dividend mix, the capital dividend account, income splitting where TOSI allows it. That’s when this strategy shines.
What changes
The deduction can reduce taxable corporate income and in the process help lower the overall cost of getting funds from the corporation into the shareholder’s hands. There’s no holding period or market exposure. The right structure depends on your corporation’s safe income, integration position, and overall tax profile so it’s best coordinated with your accountant. My team is happy to work with them directly.
What it doesn’t do
It doesn’t change the corporate-level tax already paid on the profit. It doesn’t remove issuer risk. The company has to complete its eligible exploration spending on time, or the tax benefits can be reduced or denied, in whole or in part.
Questions
Start with the Primer.
A guide to the tax benefits and mechanics of flow-through shares. One transaction, completely outlined, start to finish. It answers much of what people ask me at the start of their investigation.
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Ask a question, or book a meeting.
If you’d rather I speak with your accountant first, send them the For Accountants page. I’m happy to take it from there.
