Lifetime tax planning

Would a holding company actually help me?

Your investments are growing in the corporation that runs your business. A holding company, which can hold investments or shares in another corporation, may sound like the next step. But what would it do for you? Compare the benefits, costs and plans for a future sale before adding one.

See what changes the picture

The part worth a closer look

Another corporation should solve a real problem.

A job to do

Which assets should be held together?

Compare business needs, risk, access and the cost of a second corporation. A holding company is a separate corporation, not a tax-free personal account.

Operating business
Investments
Owner’s needs

The seller matters

Who would the buyer pay?

A holding corporation selling operating-company shares differs from an individual selling qualifying shares. A corporation cannot claim an individual’s lifetime capital gains exemption.

What is sold
Who sells it
Who receives the gain

This example explains the choice. It does not estimate tax savings from setting up a holding company.

What this could mean for you

Start with the job you need it to do.

An owner has built up investments in a successful business. Keeping some assets in a separate corporation may help. But it depends on how the business earns money, who owns it and how the owner plans to sell or retire.

Where should you keep the extra money?

Compare keeping investments in the business, in a holding company or in your personal accounts. Include access to cash, business risks, costs and the tax when you use the money.

Who would sell to a buyer?

A holding corporation selling operating-company shares is different from you selling qualifying shares personally. A corporation cannot claim an individual’s lifetime capital gains exemption.

What changes across the group?

Corporations linked under the tax rules may share the small-business tax limit. Their investment income can reduce that limit. Adding a holding company does not reset those rules. Check the tax before moving money between corporations.

The right setup depends on what comes next.

A holding company can help, but it does not automatically protect every asset or make transfers tax-free. It also does not guarantee a tax break on a future sale. Check what a buyer would buy and who would be selling it.

Questions worth answering early.

What will the buyer actually buy, and from whom?
Does the structure keep the right assets available for the business and the family?
Would its benefits justify the extra legal and annual administration costs?

Sources and limits of this example

Income Tax Act: capital gains deduction
Income Tax Act: intercorporate dividends
Income Tax Act: small business deduction

Tax rules checked September 29, 2026. This is a general example. The sources explain the rules, but cannot tell you what your family would save. Your situation, costs and future tax rules can change the result.

The next question

The decisions connect.

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