You are about to leave our mobile site. Bmo private banking investments the absence of planning, when an individual passes away owning shares of a private company, they could be exposed to double or triple taxation. When an owner of shares of a private company passes away, there are valuable strategies that can effectively reduce the total taxes payable on the corporate assets that were owned by the deceased.
Post-mortem planning considers the collection of tax planning strategies that can be applied following death to help minimize the overall tax bill on the remaining assets and the income these assets generate. The tax rules involved in tax reduction strategies after death are complex. Professional expertise is required to effectively execute and realize the available tax saving. The following is a simple example to illustrate the need for planning. 1,000,000 investment portfolio from when he sold his business. The table illustrates a summary of tax liabilities with and without planning. This much lower amount is based on the tax liability realized on the terminal tax return of the deceased.
Even though post-mortem planning is not implemented until after death, it is very important for owners of private companies to provide the ability for their future executors to implement the strategies discussed above. This will allow their executors to efficiently minimize taxes, preserve inheritance values and leave their beneficiaries with more. Ensure that the future executor is familiar with knowledgeable tax professionals who specialize in complex estates involving private company shares. As the tax rules highlighted in the above example are very complex, professional expertise is required to effectively execute and realize the available tax savings. For more information, speak with your BMO financial professional.