A short discussion (likely from a video) warning business owners about risks in using corporate retirement insurance programs — specifically the shareholder-borrowing route. The speaker notes that shareholder borrowing can create serious tax problems revealed upon CRA audit or at the shareholder’s death. The tone is cautionary and practical for corporate/business owner audiences.
Chapters
What we're going to talk about, and you guys have set the stage really, really well, is when it comes to our industry, the corporate business owners starting to look for retirement gets presented to them to set themselves up for retirement using what's called that corporate retired insurance program. In that corporate retired insurance program, there's two routes to choose from. One is through corporate borrowing, and then the other is through shareholder borrowing. And the strategy around shareholder borrowing is the one I'd like to talk about because this is the one that can land the shareholder into very, very troubling waters. Unfortunately, business owners and shareholders being presented this option, like you guys both very adamantly just shared, can you imagine the worst part? Discovering the amount of taxes that one will need to pay? Because just of how it's set up, the worst is you get audited by the CRA and at death is when it's discovered.
You know one thing too, Henry. You know who never gets invited to a funeral?
Nope.
Revenue Canada. I don't think they've.
Ever received an.
Invite to attend someone's funeral. And it's the last organization representative of an organization that a person wants to see when they're dealing with the loss of a loved one or when a corporation is dealing with the loss of a key person, dealing with a loss of one or more of the owners. So I think we need to keep that into perspective.
