We helped a client defer $230,000 in tax and secure income for retirement

One of our long term clients received an excellent offer for his private business.  While the price and payment terms made this offer look very attractive, the offer to purchase assets rather than shares resulted in heavy taxation.  Naturally, we were able to advise on various strategies to mitigate the tax burden and, under the direction of our wealth management division, we were able to further defer taxes and provide a substantial jump in our client’s tax-sheltered retirement funds.

We advised our client to set up an Individual Pension Plan (IPP).  Approximately $750,000 was eligible to be funded for the past service of the business owner and his wife, providing an immediate reduction in taxes due of about $230,000. This structure also provided a method for continued sheltering of future income from taxes.

Our wealth steward invested the IPP with a focus on after-tax, risk adjusted returns.  Our investment advisor also reviewed the client’s current RRSP and other investment holdings and rebalanced the portfolio based on our client’s needs. When the global markets plummeted 45 to 55%, this client saw a modest decline of less than 10% and was back in the black within 18 months.

Our client is now fully retired and secure in the knowledge that he can sustain his family throughout his retirement years.