A short talk by Bob Gauvreau about the importance of obtaining professional, defensible business valuations during succession and estate planning—particularly for high-value businesses and non-arm’s-length transfers (e.g., parents to children)—to avoid adverse tax consequences with the Canada Revenue Agency.
Chapters
So one of the areas that we work often in, especially our sophisticated tax team, is in business succession and estate planning purposes. So during these procedures, what happens is an establishment of value of what your business is actually worth is necessary in many cases, especially if you've got a business that's worth a fair substantial amount of money in the millions of dollars. And what we need to do, especially to lock in and eliminate any sort of tax negative consequences associated with a transition, especially if we're doing a succession plan, we need to lock in the value and we need it to be done in a very professional way so that there's no issues with the Canada Revenue Agency on a go forward basis. So when we do a succession, especially when there's a non arm's length transfer from parents to kids or to a related party, we have to establish the fair market value of that transaction because it is not at arm's length. And the way that we can do that and also as part of the estate planning process, is to establish a value of what those shares are worth. And if that's the case, we need a more sophisticated business valuation completed, which our business valuations team can support you with SA.
