Our agriculture community

Farm Succession Planning

How do you maximize the Lifetime Capital Gains Exemption?

Answer:

• You may be eligible to take advantage of the Lifetime Capital Gains Exemption regardless of how you have structured the ownership of your farm.
• If you own your farm personally, you may be eligible for the Lifetime Capital Gains Exemption on the sale of farm assets. If the farm is incorporated, sale of shares in the farm corporation may qualify for the LCGE.
• The LCGE may allow qualified farms to realize $1 million from the sale tax free.
• Assuming a 50% marginal tax rate, this is a savings of $250,000
• For more information please see the following article:
  • Sell Farm Capital Gains Navigator Article

Tax Efficient Strategies to Transition to the Next Generation?

Answer:

• Canadian tax rules allow you to transition your farm to your spouse or children on a tax deferred basis
• You may be eligible to utilize the Lifetime Capital Gains Exemption when you transfer your farm to certain family members during your lifetime or as part of your estate plan
• For more information on transitioning your farm to family during your lifetime or through your estate, please see the following articles:
  • Transfer Farm to Family / Family Farm and Estate

Is Incorporating Your Farm Right For You?

Answer:

• There are several advantages to incorporating your farm including:
  • Tax Deferral and the Small Business Deduction
  • Income Splitting Opportunities
  • Lifetime Capital Gains Exemption
  • Implementing an Estate Freeze
• For more information on the potential advantages of incorporating your farm, please see the following article:
  • Incorporate Farm