Section 85 Rollovers and S. 86 Exchanges

Estate Freeze

An estate freeze allows shareholders to ‘freeze’ their interest in a corporation by converting their capital growth shares to fixed value preference shares. Typically, these are done in the context of estate planning.

Rollover of Assets

A section 85 rollover allows an individual or corporation to transfer capital property to a corporation on a tax neutral basis, meaning no tax is paid on the transfer. Preference shares that are pegged at the aggregate value of the assets are taken back in exchange for the transfer of assets. The individual can then redeem these shares over time; the adjusted cost base portion of the fixed value preference shares can be removed from the corporation tax free. The value between the ACB and the FMV, when rolled in, can be redeemed as a deemed dividend. Section 85 rollovers can be an extremely useful tax planning tool.

Section 85 Rollover, Section 86 Share Exchange and Estate Freezes

With years of experience in corporate and tax, we routinely prepare the documents required for any rollover transaction, share exchange and estate freeze. These documents may include the APA, resolutions, T2057, Articles of Amendment as well as physically issuing the rollover, converted or freeze shares. We update all affected minute book ledgers and registers as well as take care of the Form 1 Notice of Change filing where required by the Reorg.

With years of experience in corporate and commercial law, Kalfa Law Firm is your premier partner for your corporate and tax needs.