Donations from Entrepreneurs
The sale of your business is a key milestone in life and it will often generate a significant tax bill in the year of sale. Charitable entrepreneurs should consider making donations in that year to help to offset some of the tax liability.
The majority of private businesses in Canada are categorized in the Income Tax Act as Canadian Controlled Private Corporations (“CCPC”). Both operating companies that carry on a business and holding companies (“Holdcos”) that typically hold investments and other property of the shareholders, can claim gifts equal to 75% of net revenue annually. The challenge is getting money out tax-effectively, which a donation can often facilitate.
- Owners of private companies have many options to donate
- Giving from entrepreneurs may be by one or more company or by shareholder
- Gifts could be cash-flow, dividends, corporate assets or corporate shares
Review our Ways to Give section to learn more.
Or look at some of the gift planning case studies we’ve found for businesses.