Oakville Tax Lawyer for CRA Disputes, Business and Estate Tax Planning

Many of our Oakville clients are incorporated professionals and owner-managers: physicians, dentists, engineers, consultants, contractors and family business owners. Their tax affairs often involve holding companies, family trusts, shareholder loans and dividends paid to family members, all areas the CRA reviews closely. A routine CRA review of one year can expand into a multi-year audit of both the corporation and its shareholders.

We represent clients in audits involving shareholder benefits and loans under section 15, the tax on split income rules that apply to dividends paid to family members, reasonableness of salaries paid to relatives, home office and automobile expenses, and the characterization of income from real estate. Where the CRA has already reassessed, we file Notices of Objection and, if needed, appeal to the Tax Court of Canada.

For families with significant savings, real estate or private companies, the tax on death can be the largest bill they will ever face. Canada deems a person to dispose of their capital property at fair market value on death, and Ontario's Estate Administration Tax adds 1.5% on the value of probated estates above $50,000. With planning, much of this can be deferred, reduced or funded in advance.

We advise Oakville families on estate freezes, family trusts, multiple wills to reduce probate tax, spousal rollovers, insurance funding and post-mortem planning to avoid double tax on private company shares. We also act for executors who must file final returns, obtain CRA clearance certificates before distributing estate property, and respond to CRA audits of the deceased.

Halton residents increasingly have assets, family or business interests outside Canada. US citizens living in Oakville must file in both countries, Canadians who spend winters abroad need to protect their residency status, and families who receive inheritances from abroad may have foreign trust reporting obligations. Missing foreign reporting forms, such as Form T1135 for specified foreign property over $100,000 or Forms T1141 and T1142 for non-resident trusts, can lead to significant penalties even when no tax is owing.

We help clients identify these obligations, fix past non-compliance through the Voluntary Disclosures Program or penalty relief requests where available, and plan moves into or out of Canada, including the departure tax that applies when someone ceases to be resident.

A sale is the moment when tax planning pays off or fails. Owners of qualified small business corporations may be able to shelter up to $1.25 million of capital gains with the lifetime capital gains exemption, but only if the company has met asset tests for the period before the sale. Purifying a corporation of passive assets can take time, so planning should start well before a buyer appears.

Real estate sales raise their own issues, including the principal residence exemption, the residential property flipping rule for properties held less than a year, and HST on new or substantially renovated homes. We review transactions before they close and defend positions if the CRA challenges them afterwards.

Start by identifying exactly what you received. A request for information or an audit letter is the beginning of a review, a proposal letter sets out adjustments the auditor intends to make, a notice of reassessment starts the clock on your objection rights, and a collections notice signals that the CRA is pursuing payment. Each has a different deadline and calls for a different response.

Avoid the instinct to call the CRA and explain everything informally. What you say can become part of the audit file and be used to support adjustments and penalties. Instead, gather the returns and records for the years involved, keep copies of everything you receive, and speak with a tax lawyer before responding. If you work with an accountant, we will coordinate with them so that their knowledge of your records supports a privileged, lawyer-led response.

For incorporated clients, remember that an audit of the corporation may lead to questions about shareholders, and an audit of you personally may lead to questions about your company. Planning the response for both from the outset avoids inconsistent explanations that the CRA may later rely on.