Canadian Lawyer InHouse

October/November 2020

Legal news and trends for Canadian in-house counsel and c-suite executives

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www.canadianlawyermag.com/inhouse 29 common shares held by a family trust or younger family members, so the lower the value at the time of the freeze, the more that can potentially be deferred and taxed in the hands of someone who has a longer life expectancy." The recovered value will, therefore, accrue to the new common shares, positioning the parties to more fully benefit from an estate freeze. corporate planning decisions are made around those regimes. The team actively monitors carbon costs, another factor that has significant impact on business decisions. "Typically, we don't pursue aggressive tax planning strategies, which I think makes it easier for us to manage that risk," says Jeffers. Despite government support, many businesses continue to struggle. In some cases, carrying out an estate freeze at times of economic weakness can offer a huge opportu- nity to business owners, according to Morris. "The value of an estate freeze is often heightened during a pandemic because valuations for most businesses are lower," he says. "Under Canadian tax law, when someone dies, they are generally deemed to dispose of all their assets at fair market value. If they froze the value of their business during their lifetime, the growth can accrue to new An estate freeze can reap positive rewards, providing there is an expectation of growth, Morris says. In addition to deferring capital gains, it can facilitate multiple family members utilizing their lifetime capital gains exemption of $883,384 per person. Where a value recovery is not anticipated, an estate freeze would not be advisable, however. "Everything is not so much tax planning related but survival related so the wage subsidy is something that a lot of companies are looking at in terms of weathering these times." Ryan Morris, WeirFoulds LLP

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