Business succession simply refers to passing the ownership of a business from one set of hands to another. Business succession can take many forms and includes everything from an outright sale of a business to a third party to an intergenerational transfer during the lifetime of, or on the death of, the owner.
In this course we deal with the short-term, that is, the immediate or near-immediate sale of the business (assets) or the business interest (shares in a corporation) where the disposal occurs in a single transaction or a group of transactions. The emphasis of this course is on the income taxes arising from the transaction(s). The quantification of these tax costs is the most pressing concern when advising a client in these circumstances. Small or incidental tax planning opportunities may arise, notwithstanding the time constraints, and if practical, these opportunities need to be exploited. Conversely, there are long-term planning strategies which cannot be used with an immediate/near-immediate disposal.
The bulk of businesses requiring succession/sale tax advice from CGAs are small businesses, most often with one or only a few owner-managers/shareholders. This course is written from that perspective, and unless otherwise noted, concentrates on Canadian-controlled private corporations and resident Canadian individuals. The materials are believed representative of common problems encountered by a CGA in practice whether advising proprietors, partners, or a corporation and/or its shareholders.
Throughout the course there are frequent references to the Income Tax Act, Canada Revenue Agency (CRA) Interpretation Bulletins and Information Circulars, and occasionally a particular tax case is referenced. Each of these is specifically identified and provided to assist you in further researching the discussion. It is expected that you have a current copy of the Income Tax Act and either have an up-to-date tax subscription service or can access these bulletins/circulars/cases via the internet.
The course is based on the Income Tax Act as it stood at February 4, 2011. Any pending legislative amendments, pronouncements, and proposals announced up to then are incorporated into these materials. Also included are the measures affecting partnerships announced in the March 22, 2011 federal budget and reintroduced in the June 6, 2011 budget. You are expected to have a current Income Tax Act (ITA), as some of the ITA references included in these materials are paraphrased or merely cited, and you will want to refer to the actual provisions to build your comprehension.