Budget 2016 proposes changes for the Capital Dividend Account (CDA). In addition to the changes outlined in the recent “Changes to the Capital Dividend Account” post, there is another important change that we would like to highlight as it will affect many clients. Background The Capital Dividend Account is a cornerstone of effective succession and…
Estate Planning
Changes to the Capital Dividend Account
The 2016 Federal Budget announced changes that will impact the Capital Dividend Account and transfers of life insurance policies between shareholders and corporations. Prior to these changes, there was a significant tax planning opportunity for shareholders of closely-held companies to transfer personally-owned policies to their corporations in exchange for proceeds equal to the policy’s Fair Market…