Tax Planning for Businesses
The Victoria Tax Law Group at Cook Roberts LLP provides tax planning advice in respect of a wide variety of business matters. We often work with accountants, financial planners and other lawyers to help existing businesses minimize taxes while ensuring compliance with relevant provincial legislation and the applicable rules in the Income Tax Act.
Clients who are introduced to us by other professionals find that we add value to their businesses by creating tax-efficient business structures or by restructuring existing businesses to make them more tax-effective. Our clients appreciate that we are a quick telephone resource for the business and tax questions that frequently crop up in day-to-day operations.
The lawyers in the Tax Law Group know that at different stages of a business, different concerns will be relevant. A younger client in the start-up or growth phase of a business who requires most of the profit earned by a business to support a family may find there are considerable savings to be had by incorporating the business and splitting income with a spouse. As the business becomes more profitable, the client may find that adding a holding company to the corporate structure allows the client to save for retirement at preferential tax rates and preserving eligibility for the capital gains exemption. When the client nears retirement, the client may wish to again reorganize the business in order to implement a succession plan or minimize the amount of tax that will eventually become due on death.
The Tax Law Group has over 40 years of experience in resolving disputes with the CRA. The complexity of a dispute is often not tied to the amount in issue. Some of our clients say it feels like the CRA is spending more money pursuing a claim than the amount actually in issue. The CRA and their legal counsel at the Department of Justice are mandated by statute to ensure that taxpayers comply with Canada’s tax laws. This means that CRA auditors do not have the kind of financial budget that makes sense to regular taxpayers. We take a practical approach in resolving tax disputes. Our goal is to assist our clients to get to the correct tax result in a cost-efficient manner.
Most of the time Canadians can safely assume that our financial circumstances are private matters. How much we make, our debt levels, and how much we have put aside for retirement are not topics for polite dinner conversation. These private matters are precisely the subjects that the CRA is interested in. Our tax lawyers understand that dealing with the Canada Revenue Agency (CRA) can be overwhelming.
We understand the discomfort our clients feel when they allow CRA auditors to peer into the details of their personal lives. Whether at a CRA audit, CRA appeals (for Notices of Objection) or in Tax Court, it is also our job to keep our clients informed about the sometimes byzantine manner that their tax files are dealt with by government agencies. We have substantive tax expertise and in-depth knowledge of CRA administrative policy and procedures.
Trust, Tax and Estate Planning
The lawyers in the Tax Law Group have substantial expertise in developing and implementing estate plans for our clients. They take the time to meet with clients and ensure that each plan that is developed meets the client’s own goals and that the client both understands and feels comfortable with the plan before it is implemented.
The Tax Law Group prepares wills, powers of attorneys, and health care representation agreements to help clients develop their own personalized estate plan. Despite sometimes common perception, no two estate plans are ever identical. We understand that everyone has their own beliefs, goals, and ideas for what they would like to see happen after their incapacity or death. We make sure our client’s wills, powers of attorney and health care representation agreements reflect those wishes.
The Tax Law Group frequently uses trusts to achieve their client’s estate planning goals. When appropriate, trusts can be used for income splitting, transferring family business or other wealth from one generation to the next, saving probate fees on death, ensuring that family wealth stays in the family, providing privacy over one’s estate, protecting one’s loved ones from themselves and protection against claims from family members on death. The lawyers in the Tax Law Group specialize in the use of trusts to meet the individual’s needs and goals.
The Tax Law Group also have extensive experience in implementing and administering family trusts and other trusts for persons, charitable purpose trusts, and non-charitable purpose trusts. We also advise and represent trustees on their role, powers, duties and obligations.
Voluntary Disclosures (Tax Amnesties)
The lawyers in the Tax Law Group represent clients who have unreported or underreported their income to the CRA or have failed to comply with other tax obligations, such as the requirement to disclose foreign business assets worth more than $100,000.
The CRA Voluntary Disclosure Program allows taxpayers to come forward voluntarily to amend previous tax filings or advise the CRA about unreported income, off-shore assets, or any other unsatisfied tax obligations.
If a taxpayer’s Voluntary Disclosure is accepted by the CRA, the disclosure will be considered “valid” and the taxpayer will not be charged with penalties or criminal prosecution. Additionally, the CRA has the discretion to grant interest relief. For Voluntary Disclosures that extend beyond the three most recent taxation years, interest relief is typically granted.
The Canadian taxation system is a self-reporting system. The program applies to taxpayers who either intentionally or unintentionally misfiled their tax filings. The voluntary disclosures program is a good option for taxpayers who wants to bring themselves into compliance with Canada’s federal tax laws.
To qualify as a valid voluntary disclosure, your disclosure must comply with the following conditions:
- The disclosure must be voluntary. If the CRA has contacted you with respect to an audit, investigation or enforcement action, your disclosure will likely not be voluntary;
- The disclosure must be complete. If you come forward, you will need to provide full and accurate information and documentation regarding the years in issue;
- The disclosure must either involve a penalty or the potential imposition of a penalty; and
- The disclosure must include information that is at least one year past due.
Dealing with the CRA’s Voluntary Disclosure Program on your own can be daunting. The tax lawyers in the Tax Law Group have extensive experience assembling submissions, negotiating with the CRA employees in the Voluntary Disclosure Program and ensuring compliance with the Program’s rules.
Our tax lawyers can assist you with initiating a voluntary disclosure on a no-name basis. This allows our tax lawyers to speak to the CRA on your behalf on a no-name basis at the preliminary stage. You would then have the option whether or not to complete the voluntary disclosure and provide your name.
Consultations with our tax lawyers are protected by solicitor-client privilege. We are obligated not to divulge the contents of those discussions and cannot be forced to reveal those discussions except in the rarest of circumstances. Many of our Voluntary Disclosure clients are referred by prudent accountants and financial planners who are aware that the rules of confidentiality that apply to their professions do not provide the level of discretion that a solicitor can provide.