Financial Planning For Canadian Business Owners

In this episode host, Jason Pereira, talks with Justin Abrams who is a partner with Kraft Berger LLP. Justin is a tax expert, and he is here to talk about the implication of expatriates. 

Episode Highlights:

• 1.10: Justin says he is a tax partner at Kraft Berger LLP in Toronto, advising and managing clients.  
• 2.38: Jason asks Justin, “From your standpoint what is the first thing people need to consider when leaving the country?”
• 2.40: Justin says that leaving a country depends on what asset you own from a tax point of view. 
• 2.54: Canada has a regime that if you owned property when you were a resident, the value accrued should be taxed in Canada. If you were to leave Canada, it has a worldwide taxation system.
• 5.22: Justin talks about the unique tax system that Canada has. 
• 6.00: When you leave Canada, everything you own is subject to tax except Canadian Real Property. The reason is non-resident is subject to tax when they sell their property. 
• 08.26: One of the interesting things to note is that if you are moving to the United States, one thing that the immigrant can do is sell their property in RSP and then buy it back. 
• 10.35: Justin throws light in tax exemption for people who stay and owns property in Canada for less than 5 years. 
• 11.17: Jason says, “If you are an individual, then implications aren’t harsh in Canada.”
• 14.34: Jason and Justin talk about “What happens to business owners when they decide to leave Canada?”
• 15.47: If it is a Canada Corporation, nothing happens to the corporation, it remains. Even though you are a resident of United States or Spain. When a non-resident wants to take out the company, there is going to be gains in the underlying value in the corporation. 
• 19.52: Justin shares detailed classifications of Canadian Tax Systems and Rates.
• 20.27: Jason inquires, “What are the steps involved in mitigation?”
• 21.20: Justin gives valuable insights on Capital Dividend Account. As part of the mitigation strategy, he also suggests reducing your company’s value before selling it out. 
• 24.26: Justin gives real-life examples about how to best save tax.
• 28.04: Jason talks about the triple tax situation that one might fall into. 
• 28.14: Jason is curious to know “What happens when people decide to come back to Canada?”
• 29.01: “If you are planning to come back to Canada, you can un-wind or defer to pay tax.”, says Justin. If you are planning to come back, pledge some valuable asset before leaving.
• 31.38: Justin talks about unwinding the departure tax. 
• 32.45: Justin says when you leave, Canada any gains in the property would have been subject to tax in Canada. 
• 35.44: Jason talks about the importance of planning your exit from Canada properly. 
• 37.54: When you leave Canada, make sure the country where you are moving to gives you a cost base. 

3 Key Points:

1. Jason and Justin talk about the serious tax implications when one decides to leave Canada.
2. If you are a business owner or shareholder and you decide to leave the country. Canada would want the Accrued Value. 
3. Jason shares the key takeaway from this episode. If you are leaving the country, you may or may not have tax implications. But if you have substantial wealth, then you will have to pay tax when leaving the country.

Tweetable Quotes:

• “When you leave Canada, everything you own is subject to tax except Canadian Real Property.”- Justin Abrams
• “You can pledge private company shares if those are the shares that gave rise to the tax.” - Justin Abrams
• “If we leave the country, we will have to pay 27% tax.” - Justin Abrams
• “If you are coming back to Canada, you can make it a cashless endeavor.” - Justin Abrams
• “Taxable Canadian property is taxable if you are a non-resident or not.” - Justin Abrams

Resources Mentioned

• Justin Abrams: LinkedIn | Website
• Facebook – Jason Pereira’s Facebook
• LinkedIn – Jason Pereira’s LinkedIn
• Woodgate.com – Sponsor
• LinkedIn – Jason Pereira’s LinkedIn
• Podcast Editing

Transcript