How we help
- Owner-manager compensation review (salary vs. dividends vs. capital dividends)
- Holding-company / opco-holdco structure analysis
- Lifetime Capital Gains Exemption (LCGE) qualification planning
- Family trust structures for income splitting and estate planning
- Section 85 rollovers and corporate reorganizations
- Estate freeze planning to lock in current value
- Charitable-giving strategies through the corporation
Why business owners overpay tax
The single biggest reason Canadian business owners pay more tax than they have to is that their structure was set up at start-up and never revisited. The right structure for a one-person consulting business with $200,000 of revenue isn't the right structure for a 30-person operating company with $5M of EBITDA and a planned sale in five years. Tax planning is most valuable at exactly the moments — growth inflections, family changes, succession decisions — when business owners are least likely to slow down and revisit it.
What a planning review looks at
A comprehensive review starts with the corporation's current structure and works outward. The questions we ask:
- Is the right entity on title? Many businesses have grown into structures that no longer fit — the operating company holds passive investments that should be in a holdco, the owner's family is on the shareholders' register in ways that limit flexibility, or the business has multiple lines that would benefit from separation.
- How is the owner paid? Salary, dividends, capital dividends, and shareholder loan repayments each have different tax characteristics. The right mix depends on the owner's RRSP contribution room, CPP-contribution history, family income-splitting opportunities, and the corporation's accumulated tax pools (RDTOH, CDA, GRIP).
- Is the LCGE in play? The Lifetime Capital Gains Exemption shelters up to $1,016,836 of gain on qualifying small-business-corporation shares (2024 amount, indexed annually). Multiplying the exemption across family members can shelter several million dollars of eventual sale proceeds — but only if the shares are properly structured and the holding-period rules are met.
- Is there an estate freeze opportunity? Freezing the value of the operating company at today's level and transferring future growth to a family trust or to the next generation is one of the most-used tools in succession planning. It works best when the business is poised to grow.
- What is the exit plan? Share sale, asset sale, MBO, family transfer, IPO — each has materially different tax outcomes. Planning the exit five years out usually produces a better after-tax result than scrambling six months before.
The compensation review
For most owner-managers, the salary-versus-dividend question is the single largest annual tax-planning lever. Salary creates RRSP room, CPP credits, and is deductible to the corporation; dividends preserve corporate cash for reinvestment, allow income splitting (within the tax on split income rules), and can be capital dividends (tax-free) where the corporation has CDA balance. The right mix changes year to year depending on the corporation's profile and the owner's other income.
Trusts in business planning
Family discretionary trusts are a mainstay of business-owner tax planning. They allow income to be allocated to family members in lower brackets, hold growth-class shares so that future appreciation accrues outside the owner's estate, and serve as a flexible vehicle for transferring control to the next generation. The 21-year deemed-disposition rule under ITA s. 104(4) imposes a planning deadline — most family trusts unwind or restructure before year 21.
How we work the file
Most planning engagements at Barrett Tax Law start with a structural diagnosis and a written planning memo identifying the highest-value moves. Implementation — Section 85 rollovers, share-class freezes, trust settlement, holdco creation, dividend planning — runs in parallel with the corporation's normal year-end work. Fees are typically fixed for the planning phase and capped for implementation.
What to expect when you call us
Your first call is a free, no-obligation consultation with a tax lawyer. We will review the details of your situation, explain your options under the Income Tax Act and CRA administrative practice, and give you a clear, fixed-fee quote if you choose to retain us. Your consultation is confidential, and once we are retained, communications are protected by solicitor–client privilege.
If you retain us, we begin work within 24 hours of being retained.
Frequently asked questions
Is the consultation really free?
Yes. Most cases qualify for a free, no-obligation consultation with one of our tax lawyers. During the call we'll review your situation, explain your options, and give you a clear quote if you decide to retain us.
What does a tax lawyer do that an accountant does not?
A tax lawyer focuses on the legal side of tax — disputes, litigation, and the structuring of transactions in light of the law and anti-avoidance rules. That includes representing taxpayers in CRA audits and objections, appearing at the Tax Court of Canada, defending penalties and director or derivative liability, and designing reorganizations such as section 85 rollovers and estate freezes.
The most practical distinction is privilege. Communications with a lawyer are generally protected by solicitor-client privilege, while communications with an accountant generally are not and can be demanded by the CRA. Where the facts are sensitive or the matter could become contentious, that protection matters.
Lawyers and accountants often work together — the accountant on the numbers and filings, the lawyer on strategy, privilege, and the legal record. Barrett Tax Law regularly coordinates with a client's existing accountant.
Do you serve all of Canada?
Yes. Barrett Tax Law represents clients across Canada. We have offices and local phone lines in Toronto, Calgary, Edmonton, Fort McMurray, Ottawa, Vancouver, and Winnipeg, plus a national toll-free line at 1-877-882-9829.
Who is Barrett Tax Law and what areas does the firm handle?
Barrett Tax Law is a Canadian boutique tax law firm that represents individuals and businesses in their dealings with the Canada Revenue Agency. The firm's work spans CRA audits and disputes, voluntary disclosures, Tax Court of Canada litigation, collections matters, and corporate and estate tax planning.
The firm was founded in 2009 and has represented many thousands of clients across Canada. Its head office is in Concord, Ontario (Vaughan), and it serves clients nationwide. You can reach the firm toll-free at 1-877-882-9829 (1-877-8-TAXTAX).
Most matters qualify for a free, no-obligation consultation, and most are quoted on a fixed-fee basis once scope is understood, so the cost is known before work begins.
What does a tax lawyer do that an accountant cannot?
Accountants prepare returns and financial statements. Tax lawyers represent you when those returns are challenged, audited, or prosecuted — and our communications are protected by solicitor–client privilege, which accountant communications generally are not.
What should I do if I receive a letter from the CRA?
First, identify what the letter is and what it requires. A CRA letter may open an audit, ask for documents, propose adjustments (a proposal letter), confirm a reassessment, or start collection action — and each carries its own deadline and its own implications. Note any date by which a response is required.
Do not ignore it, and be careful about responding off the cuff. What you say and produce can shape your later objection and appeal position, and casual admissions can be difficult to undo. If the letter proposes adjustments or penalties, or if significant amounts are involved, get advice before responding.
A free consultation can help you understand the letter, the deadline, and the right next step. Acting early — while options are still open — is usually far better than waiting until a deadline is near.
Will the CRA criminally prosecute me?
Most CRA disputes are civil. Criminal prosecution is reserved for serious tax evasion or fraud, usually involving deliberate misrepresentation. If you have unreported income, a voluntary disclosure is one of the standard ways to reduce criminal-prosecution risk.
Is the first consultation really free?
Yes. Most matters qualify for a free, no-obligation consultation with an experienced tax lawyer. The consultation is a chance to describe your situation, get a clear sense of the options and likely path, and receive a fee structure in writing before you commit to anything.
You can reach the firm toll-free at 1-877-882-9829 (1-877-8-TAXTAX) to arrange a confidential consultation. The head office is in Concord, Ontario (Vaughan), and the firm serves clients across Canada.
Are my communications with a tax lawyer confidential?
Yes. Communications between you and your lawyer for the purpose of obtaining legal advice are generally protected by solicitor-client privilege, one of the most strongly protected confidences in Canadian law. In practical terms, the CRA generally cannot compel disclosure of privileged communications.
This is an important difference from working with an accountant or other non-lawyer representative, whose communications and working papers can generally be demanded by the CRA. Where the facts are sensitive — unreported income, offshore assets, or potential penalties — that protection can be significant.
Privilege has limits and can be waived inadvertently, so it should be handled with care. A consultation can explain how privilege applies to your particular situation.
How fast can you start on my case?
We typically begin work within 24 hours of being retained. For audit deadlines, Notices of Objection, and other time-sensitive matters, we move immediately.
What if I have unfiled tax returns from many years ago?
We routinely handle 5+ years of unfiled returns. Through the Voluntary Disclosures Program — applied for before the CRA contacts you — we can usually eliminate gross-negligence penalties and limit interest exposure.