Personal and Business Taxation and Estate Planning


Careful attention to taxation and estate planning from the outset not only minimizes tax liabilities and ensures compliance but also secures the business’s future and the financial well-being of its owners and their families. Consulting with professionals in tax and estate planning is advisable to navigate these complex areas effectively.


Taxation and estate planning should be addressed when starting a business, incorporating a company, or setting up a partnership. Each type of business entity has its own unique taxation and estate planning issues. The Personal Real Estate Corporation (PERC), for example, can be used as an effective tax shelter. However, there are specific rules and conditions that must be met to qualify and maintain a PREC. Failure to adhere to these rules can have negative financial consequences. Partnerships on the other hand could result in excessive personal taxation which forming a corporation might effectively reduce.

Our qualified professionals provide a separate taxation and estate planning advisory service which should be obtained before commencing any type of business. This service will provide a tax and estate optimization strategy which should then be incorporated into the business creation process. Below is a list of some of the concerns that should be addressed in a tax optimization strategy:

1. Legal Structure and Tax Implications

  • Business Formation: The choice of business structure (e.g., sole proprietorship, partnership, corporation) affects taxation. Each structure has its own tax implications, and understanding these can help in choosing the most tax-efficient form.
  • Incorporating a Company: Corporations can benefit from lower corporate tax rates compared to personal tax rates on high personal income. However, incorporating involves complex tax regulations.
  • Partnerships: Partnerships pass profits directly to partners, who then pay personal income tax. Understanding how to structure and allocate income can optimize tax outcomes.

2. Financial Efficiency and Profit Maximization

  • Tax planning helps in identifying tax credits, deductions, and incentives that can significantly reduce tax liability, thereby increasing the company’s profitability and cash flow.
  • Proper planning can help avoid common financial pitfalls that might arise from tax mismanagement, such as underpayment penalties or cash flow problems due to unexpected tax liabilities.

3. Estate Planning and Business Continuity

  • Estate planning ensures that in the event of death, a business owner’s interests are passed on according to their wishes, minimizing potential estate taxes and providing for a smooth transition.
  • It helps in setting up buy-sell agreements, life insurance policies, and trusts that are crucial for the continuity of the business, protecting the business’s value for heirs, and potentially reducing estate taxes.

4. Compliance and Legal Protection

  • Proper tax planning and compliance with tax laws protect the business from legal penalties, fines, and audits that can arise from non-compliance. It’s not just about paying taxes but doing so in a manner that adheres to regulations.
  • Estate planning, in conjunction with business structure, can help in navigating legal complexities related to ownership, succession, and liability, providing a legal shield for business owners and their heirs.

5. Strategic Business Planning and Growth

  • Taxation and estate planning are integral to strategic business decisions, affecting investment, expansion, and exit strategies. For example, understanding the tax implications can influence decisions about reinvesting profits, distributing dividends, or selling the business.
  • Estate planning aligns with long-term business goals, ensuring that the business can pass to the next generation or be sold in accordance with the owner’s wishes, maximizing the financial return to the estate or heirs.
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