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www.lawtimesnews.com 21 and wants to sell it or bequeath it — either to family, employees, management or others with a connection to the business — allowing them to buy in at a "nominal price," Crowe says. Crowe says the estate freeze doesn't reduce tax but merely defers it and is a solution to the liquidity issue arising if the shares were sold or transferred and money was owed to the tax man with all the cash locked up in the shares. These risks result in most businesses not surviving a transition in ownership, she says. "[An estate freeze] allows us to open the door to new people, who can then get in on that ground floor without having to go and find a big pile of cash to buy the business," she says. Lanthier says a theme of the criticism he's received from tax professionals is that estate freezes facilitate succession planning for small businesses. "Small businesses are not the issue," he says, as most small businesses have access to an exemption of $867,000 for capital gains tax on shares. Lanthier says the "mischief " with estate freezes is it allows high-net-worth families to avoid "significant amounts of tax on inter-generational transfers of capital." To provide some relief for taxpayers if Lanthier's wish of eliminating estate freezes happens, the government could institute up-to- a-point exemptions on capital gains tax paid on a deceased's estate or exemptions for small businesses if the shares are going to adult chil- dren active in the business, he wrote in an article for Canadian Accountant. Estate freezes are one problem among many and, with a tax system that hasn't seen a comprehensive review since the 1960s, Canada is due to take a close look, wrote Lanthier in the article. "Estate freezes are (with no pun intended) only the tip of the iceberg. Canadian tax legis- lation is in need of major repair," he wrote. "An estate freeze is a very common type of tax planning transaction that we use, very regularly, for private businesses." Wendi Crowe, Miller Thomson LLP A DV I C E . A DVO C AC Y. R E S O L U T I O N . de VRIES LITIGATION LLP is recognized as one of the best estate and trust boutiques in the country. devrieslitigation.com 416 640.2754 G O W I T H A W I N N I N G F I R M CL De Vries Ad.indd 2 18/09/2019 11:23:46 PM