Self-Employment Income Allocation Ontario 2026: Lump Sum vs Installment vs Deferral — Which Saves More on $750K?
Quick Answer
On $750K of self-employment income caught in an Ontario divorce, the structure of the payout — lump sum, installments over 2-3 years, or corporate deferral — can swing the tax bill by $60,000-$90,000. A single-year lump sum pushes the full amount into Ontario's top combined bracket of 53.53%, producing roughly $200,000 in tax. Spreading the same $750K across three tax years via installments drops the blended effective rate to roughly 44-47%, saving $40,000-$70,000. A corporate deferral (retaining income inside a CCPC and paying out via dividends over time) adds complexity but can drop the total tax further — at the cost of control and timing risk. The right structure depends on whether you're the paying or receiving spouse, what other income each side has, and whether the self-employment income flows through a corporation. This comparison walks through each path with Ontario-specific numbers.
Key Takeaways
- 1A $750K lump-sum equalization payment funded from self-employment income in a single tax year hits Ontario's top combined rate of 53.53% on everything above ~$253K — producing roughly $200,000 in combined federal + provincial tax. Installment payments across 2-3 years can reduce the total tax bill by $40,000-$70,000 by keeping more income in lower brackets.
- 2Under the Ontario Family Law Act (s. 5), self-employment income earned during the marriage is included in net family property through the assets it built — RRSPs, corporate retained earnings, real estate. The income itself is not equalized, but the assets it funded are. This distinction matters for structuring the payout.
- 3Spousal support payments (unlike equalization) are tax-deductible to the payer and taxable to the recipient under ITA s. 56.1 and s. 60(b). For a self-employed payer in the 53.53% bracket paying a lower-income recipient, structuring part of the settlement as spousal support — rather than pure equalization — can save $30,000-$50,000 in combined household tax.
- 4Capital gains in 2026 are taxed at a flat 50% inclusion rate. The proposed 66.67% rate above $250K was cancelled on March 21, 2025. If the self-employment income is realized through a share sale (QSBC shares), the Lifetime Capital Gains Exemption of ~$1.25M may shelter the gain entirely.
- 5Corporate-retained self-employment income adds a layer: the small business tax rate in Ontario is 12.2% (combined federal 9% + Ontario 3.2%), but extracting money via salary or dividends later still triggers personal tax. The total integrated tax rate on eligible dividends paid from a CCPC is roughly 47.74% at Ontario's top bracket — close to the personal rate but with timing flexibility.
- 6RRSP contribution room is a critical lever. The 2026 annual maximum is $33,810 or 18% of prior-year earned income. A self-employed individual with $750K of income in a prior year has substantial room to shelter equalization payments from immediate tax.
A Mississauga consultant running a $750K-revenue practice through a CCPC, separating after 14 years. The business is the largest single asset in the marriage. The equalization payment will be six figures. And the tax bill on the payout will depend almost entirely on how that money moves — not just how much. The same capital gains and deemed-disposition mechanics that catch estates also apply when business shares change hands in a divorce. The structure of the payout — lump sum, installments, or corporate deferral — can swing the combined tax bill by $60,000–$90,000.
This is the comparison most divorce lawyers don't run, because it sits at the intersection of family law (Ontario Family Law Act, s. 5), income tax (ITA s. 56.1, s. 60(b), s. 73(1)), and corporate tax (CCPC small-business rate). Here are the three paths, side by side, with real Ontario numbers.
The Scenario: $750K Self-Employment Income, CCPC, Ontario Divorce
The baseline
- Self-employed spouse (Spouse A): Management consultant, CCPC in Ontario, gross revenue ~$750K/year, net business income ~$550K after expenses
- Employed spouse (Spouse B): Public-sector employee, $95K salary
- Marriage length: 14 years
- Net family property gap: ~$750K (Spouse A's NFP exceeds Spouse B's by $750K)
- Equalization payment: $375,000 (half the NFP gap)
- Corporate retained earnings: $400K inside the CCPC
- RRSP balances: Spouse A: $280K, Spouse B: $120K
- TFSA balances: Both maxed at $109,000 (cumulative 2026 limit)
- Ontario top combined marginal rate: 53.53% (above ~$253K)
- Capital gains inclusion rate: 50% (flat — proposed 66.67% cancelled March 21, 2025)
- Ontario small business combined rate (CCPC): 12.2% (federal 9% + Ontario 3.2%)
Spouse A owes Spouse B $375,000. The question is not whether to pay — the Family Law Act requires it. The question is: what structure produces the lowest combined tax bill for both households?
Option 1: Lump-Sum Payment in a Single Tax Year
Lump sum — simple, expensive
How it works: Spouse A extracts $375K from the corporation as salary or dividends in 2026, pays the equalization to Spouse B in one shot. Clean. Done.
The tax math (salary extraction):
- Spouse A's regular salary/draw from CCPC: ~$200K
- Additional extraction for equalization: $375K
- Total 2026 taxable income: ~$575K
- Tax on the first $253K: ~$80,000 (blended across Ontario brackets)
- Tax on the remaining $322K at 53.53%: ~$172,400
- Total personal income tax: ~$252,400
- Corporate tax saved on the $375K (deductible salary): $375K × 12.2% = $45,750
- Net tax cost of extraction: ~$206,650
For Spouse B: The equalization payment of $375K is not taxable income — it's a division of property, not income. Spouse B receives $375K tax-free.
Total household tax cost: ~$206,650. Spouse A bears the entire tax burden. The marginal dollar of extraction is taxed at 53.53%.
The lump sum is the simplest structure and the most expensive. Every dollar above $253K is taxed at Ontario's top combined rate of 53.53%. For a self-employed spouse who already draws $200K/year, the additional $375K extraction stacks entirely in the top bracket. There is no bracket arbitrage, no timing lever, and no deferral. The only advantage: finality. The payment is made, the equalization is settled, and there is no ongoing financial entanglement.
Option 2: Installment Payments Over 2–3 Tax Years
Installments — bracket arbitrage through time
How it works: The separation agreement specifies that the $375K equalization is paid in three annual installments of $125K each (2026, 2027, 2028). Spouse A extracts $125K per year from the CCPC on top of their regular draw. Interest accrues on the unpaid balance at the CRA prescribed rate (~5% in 2026).
The tax math (salary extraction, $125K/year):
- Each year: $200K regular draw + $125K equalization = $325K total income
- Tax on $325K in Ontario: ~$112,000 per year
- Over 3 years: ~$336,000 total personal tax
- Minus: what Spouse A would have paid on $200K anyway (~$56,000/year × 3 = $168,000)
- Incremental tax on the $375K equalization: ~$168,000
- Corporate tax savings on $125K/year deduction: ~$15,250/year × 3 = $45,750
- Net tax cost of extraction: ~$122,250
Interest cost to Spouse A: Approximately $28,000 over 3 years on the declining balance at 5%. Still cheaper than the lump-sum tax hit.
Net cost (tax + interest): ~$150,250 vs. ~$206,650 for lump sum. Savings: approximately $56,000.
The installment structure works because it keeps each year's incremental income in the 48–51% bracket instead of pushing it all into 53.53%. The $125K annual extraction lands the total income at ~$325K — above the top federal bracket threshold (~$253K) but not as deep into it as a $575K year. The marginal rate on the last dollar is still 53.53%, but the blended rate on the equalization amount drops from ~55% effective to ~45% effective.
Section 7(1) of the Family Law Act explicitly permits installment orders for equalization, and courts routinely approve 2–5 year payment schedules when the paying spouse demonstrates that a lump sum would require liquidating productive business assets. A self-employed spouse with a CCPC does not need to manufacture hardship — the fact that the equalization must be extracted from the corporation through a taxable event is itself the hardship. The interest requirement protects Spouse B from time-value erosion.
The RRSP lever inside installments
Spouse A has RRSP contribution room. The 2026 annual maximum is $33,810 (or 18% of prior-year earned income, whichever is less). If Spouse A contributes $33,810 to their RRSP in each of the three installment years, the deduction shelters ~$101K of income from the top bracket. At 53.53%, that's an additional ~$54,000 in tax savings over the 3-year period. The RRSP contribution doesn't reduce the equalization payment — it reduces the personal tax on the extraction. Spouse A still pays $375K to Spouse B; they just pay less tax to CRA in the process.
Option 3: Corporate Deferral — Keep the Money Inside the CCPC
Corporate deferral — lowest immediate tax, highest complexity
How it works: Instead of extracting $375K in salary, Spouse A retains the income inside the CCPC and pays the equalization from corporate funds via a combination of: (a) a shareholder loan to fund the equalization, repaid over time, or (b) dividend payments structured over 3–5 years, or (c) a share-value transfer where Spouse B receives shares in the CCPC as part of equalization (rare, complex, usually only where both parties agree).
The corporate tax math:
- Corporate income is taxed at 12.2% (small business rate) inside the CCPC
- $375K of retained income: corporate tax = $45,750
- Remaining after-tax corporate cash: $329,250
- Eventual extraction via eligible dividends: gross-up to ~$452,700, tax at ~39.34% effective dividend rate on eligible dividends in Ontario top bracket
- Personal tax on dividend extraction: ~$129,400
- Total integrated tax (corporate + personal): ~$175,150
The catch: Spouse B is exposed to Spouse A's credit risk and business risk for the duration of the deferral. If the CCPC fails, Spouse B's equalization payment is at risk. Courts typically require security — a charge on corporate assets, a personal guarantee, or life insurance.
Total integrated tax: ~$175,150 vs. ~$206,650 (lump sum) vs. ~$150,250 (installments with RRSP). The deferral saves on paper but adds legal costs, security requirements, and counterparty risk.
Corporate deferral is the most tax-efficient structure on paper — the small business rate of 12.2% is dramatically lower than the personal rate of 53.53%, and the eligible dividend gross-up mechanism partially integrates corporate and personal tax. But “on paper” is the key phrase. In practice, the deferral creates three problems:
- Credit risk: Spouse B is an unsecured creditor of Spouse A's corporation until the equalization is fully paid. If the business declines, Spouse B's claim ranks behind secured creditors, CRA source deductions, and potentially behind a new business line of credit.
- Control risk: Spouse A controls the timing and method of extraction. Spouse B cannot compel a dividend declaration. The separation agreement needs airtight extraction timelines and enforcement mechanisms.
- Legal cost: Drafting the security instruments (charge on CCPC assets, personal guarantee, insurance assignment) adds $5,000–$10,000 in legal fees. These costs partially offset the tax savings.
Side-by-Side Comparison: The Full Picture
| Factor | Lump Sum | Installments (3 yr) | Corporate Deferral |
|---|---|---|---|
| Net tax cost | ~$207K | ~$122K | ~$175K |
| Interest / carrying cost | $0 | ~$28K | ~$15K (legal + security) |
| Total cost | ~$207K | ~$150K | ~$190K |
| Time to settlement | Immediate | 3 years | 3–5 years |
| Risk to Spouse B | None | Moderate (payer default) | High (business + credit risk) |
| Complexity | Low | Moderate | High |
| RRSP shelter potential | $33,810 (1 year) | ~$101K (3 years) | Variable |
The Spousal Support Lever: A Fourth Path That Changes the Math
Equalization payments under the Family Law Act are not tax-deductible to the payer and not taxable to the recipient. But spousal support under the Divorce Act and ITA s. 56.1 / s. 60(b) is deductible to the payer and taxable to the recipient — if it meets the periodic payment requirements.
For this couple, the Spousal Support Advisory Guidelines (SSAG) range on $550K of imputed income, 14-year marriage, no dependent children, produces a mid-range of roughly $9,000–$13,000/month. At $11,000/month:
Annual spousal support: $132,000
Tax deduction for Spouse A (at 53.53%): $70,660 saved
Tax cost for Spouse B (at ~37% marginal on $95K + $132K = $227K): ~$48,840
Net household tax saving: $70,660 − $48,840 = ~$21,820 per year
Over 5 years of support: ~$109,000 in combined household tax savings
The tax arbitrage exists because the payer deducts at 53.53% and the recipient includes at ~37%. Every dollar transferred via spousal support instead of equalization saves the household roughly $0.17 in tax. On $132K/year of support, that's $22K/year in savings that neither side would have captured with a pure equalization structure.
The catch: spousal support and equalization are legally distinct. You cannot simply relabel equalization as support. But the total settlement — equalization + support + property transfers — can be structured to maximize the support component where the bracket differential is widest. This is the kind of integration that requires both a family lawyer and a tax accountant in the same room. For how RRSP rollovers under s. 60(j.1) interact with the equalization offset, see our full divorce tax guide.
The RRSP Rollover: Reducing the Extraction Needed
Spouse A has $280K in RRSPs; Spouse B has $120K. The $160K gap enters the NFP calculation. Under ITA s. 60(j.1), Spouse A can transfer $80K of RRSP directly to Spouse B's RRSP as part of the equalization — with zero tax consequences for either side. This reduces the cash equalization from $375K to $295K, which in turn reduces the corporate extraction needed and the tax bill on that extraction.
On a $295K extraction spread across 3 years (~$98K/year), the incremental income each year is lower, the bracket creep is smaller, and the total tax savings versus a $375K lump sum grow further. The RRSP rollover is free money — it costs nothing, triggers no tax, and reduces the most expensive dollar-for-dollar extraction from the CCPC. Every Ontario divorce financial checklist should include it as step one.
Pick Lump Sum If… Pick Installments If… Pick Deferral If…
Pick lump sum if: Spouse A has liquid personal assets (non-registered investments, TFSA surplus) to fund the equalization without extracting from the CCPC. Or if Spouse B insists on finality and will not accept installment risk. Or if the tax differential between lump sum and installments is less than $20K — at which point the simplicity of a clean break outweighs the savings.
Pick installments if: Spouse A's equalization must come from the CCPC, the amount exceeds $200K, and both parties can agree on interest terms and security. This is the right structure for most self-employed divorces in Ontario — it's where the bracket arbitrage is largest, the RRSP lever is most useful, and the legal complexity is manageable.
Pick corporate deferral if: The CCPC has substantial retained earnings, Spouse B has strong security (real property charge, insurance), and both parties accept 3–5 years of financial entanglement. In practice, this path works best when the couple has a collaborative (not adversarial) divorce and both are represented by tax-literate family lawyers. For an adversarial divorce, the control risk makes deferral impractical.
The Business Valuation Wildcard
Everything above assumes the NFP gap is already established at $750K. But for a self-employed spouse, the business valuation is where most of the fight happens. A CCPC generating $550K/year of net income might be valued anywhere from $1.5M (3× earnings, mature professional-services practice with key-person risk) to $3M+ (5.5× earnings, transferable client base with recurring contracts). The spread between valuations is often larger than the equalization payment itself.
If Spouse A's expert values the CCPC at $1.5M and Spouse B's expert values it at $2.8M, the equalization swing is ($2.8M − $1.5M) / 2 = $650K. The income allocation strategy — lump sum vs. installment vs. deferral — only matters once the valuation is resolved. Don't optimize the extraction structure while the denominator is still in dispute. For the share-split decision tree on a $1.2M business, we walk through the QSBC qualification tests and LCGE planning in detail.
Province-by-Province Context: Why Ontario Is the Expensive Case
| Province | Top combined marginal rate | Tax on $375K lump-sum extraction (incremental) | Property division regime |
|---|---|---|---|
| Ontario | 53.53% | ~$200K | Equalization of NFP (Family Law Act) |
| British Columbia | 53.50% | ~$199K | Equal division of family property (FLA BC) |
| Alberta | 48.00% | ~$178K | Equitable distribution (MPA / FPA) |
| Quebec | 53.31% | ~$198K | Family patrimony + matrimonial regime |
Ontario's 53.53% top rate (federal 33% + Ontario 13.16% + surtaxes) is the highest in Canada. The installment strategy saves the most in Ontario precisely because the bracket gradient is steepest — the gap between the ~44% bracket at $173K and the 53.53% bracket at $253K+ is where the arbitrage lives. In Alberta, with a flat 15% provincial rate above $355K, the bracket gradient is flatter, and installments save less. Ontario self-employed divorces benefit most from multi-year structuring.
What the Separation Agreement Must Cover
- Payment structure: Lump sum, installment schedule, or corporate deferral mechanism — with exact amounts and dates.
- Interest rate on deferred amounts: CRA prescribed rate, prime, or negotiated rate. Specify whether interest is simple or compound and whether it's deductible (it is not, for equalization; it may be, for spousal support arrears).
- Security: For installments or deferral — personal guarantee, charge on real property, CCPC share pledge, or life/disability insurance assignment.
- RRSP rollover: Reference ITA s. 60(j.1) explicitly. Specify the amount, the transferring institution, and the timeline for trustee-to-trustee transfer.
- Spousal support vs. equalization allocation: If the total settlement bundles both, specify the tax treatment of each component separately. CRA will look at substance over form — relabelling equalization as support without changing the payment structure will not survive an audit.
- Default provisions: What happens if Spouse A misses an installment. Acceleration clauses, penalty interest, and enforcement mechanisms.
Missing any of these creates a gap that will cost $5,000–$15,000 in legal and accounting fees to fix retroactively — if it can be fixed. The collaborative divorce model, where both parties share a financial neutral, is specifically designed to catch these integration issues before the agreement is signed.
Frequently Asked Questions
Q:How is self-employment income treated in an Ontario divorce equalization?
A:Self-employment income itself is not directly equalized — the Ontario Family Law Act equalizes net family property (assets minus debts), not income. However, self-employment income feeds into equalized assets: RRSPs funded by self-employment income, corporate retained earnings, investment accounts, and real property purchased with business profits are all included in the NFP calculation. If a self-employed spouse earned $750K/year and retained $300K inside a corporation, that $300K of corporate value is part of their NFP. The valuation date is the date of separation, not the date of divorce — so income earned after separation does not enter the equalization.
Q:Can I spread my equalization payment over multiple years to reduce tax in Ontario?
A:Yes. Under section 7(1) of the Family Law Act, the court can order equalization to be paid in installments over up to 10 years if immediate payment would cause undue hardship. Even without a court order, spouses can agree to installment payments in their separation agreement. The tax benefit is significant: spreading a $375K equalization payment across 3 years keeps roughly $125K per year in the 44-48% bracket instead of pushing the full amount into the 53.53% bracket. The paying spouse saves approximately $20,000-$35,000 in tax over the installment period. The receiving spouse should negotiate interest on the outstanding balance (CRA prescribed rate is a common benchmark) to avoid a time-value loss.
Q:Is spousal support tax-deductible for a self-employed payer in Ontario?
A:Yes — periodic spousal support payments that meet the requirements of ITA s. 56.1(4) are deductible by the payer and taxable to the recipient. The payments must be periodic (not lump-sum), made under a written separation agreement or court order, and the spouses must be living apart. For a self-employed payer in the 53.53% bracket paying a recipient in the ~30% bracket, the tax arbitrage is substantial: every $10,000 of spousal support saves the payer ~$5,353 in tax and costs the recipient ~$3,000 in tax — a net household saving of ~$2,353 per $10,000. Lump-sum spousal support is NOT deductible unless specifically structured as commuted periodic payments under a court order.
Q:What happens to my CCPC retained earnings in a divorce in Ontario?
A:Corporate retained earnings in a Canadian-Controlled Private Corporation (CCPC) are included in the NFP calculation through the value of the shares. If you own 100% of a CCPC with $500K in retained earnings and $250K in other corporate assets, the shares are valued at approximately $750K for equalization purposes — subject to a corporate valuation that may apply discounts for minority interest, marketability, or redundant assets. The retained earnings do not need to be extracted from the corporation to be equalized; the share value captures them. However, the method of eventually extracting those earnings (salary vs. dividend vs. capital dividend) determines the personal tax cost — and that tax cost should be factored into the equalization as a notional liability against the share value.
Q:How are the Spousal Support Advisory Guidelines (SSAG) applied to self-employment income in Ontario?
A:The SSAG use gross income as the starting point. For self-employed individuals, this means total business revenue minus reasonable business expenses — essentially line 15000 of the T1 (net business income) plus any add-backs for personal expenses run through the business (personal vehicle, home office above CRA guidelines, meals/entertainment). Courts routinely add back discretionary expenses that reduce reported income but benefit the owner personally. On $750K of gross self-employment income with $200K in business expenses, the SSAG income is $550K. The mid-range spousal support for a 15-year marriage with no children at home would be roughly $8,000-$12,000/month — which the payer deducts at 53.53% and the recipient includes at their lower rate.
Q:Can I use my Lifetime Capital Gains Exemption to reduce tax when selling business shares in a divorce?
A:Yes — if the shares qualify as Qualified Small Business Corporation (QSBC) shares under s. 110.6 of the ITA. The 2026 LCGE is approximately $1.25M (indexed annually). On a $750K share sale, the entire gain could be sheltered if the three QSBC tests are met: (1) 90% of corporate assets used in active business at time of sale, (2) 50%+ active-business asset test for the prior 24 months, and (3) shares held by the individual for 24+ months. A spousal transfer under s. 73(1) rolls over at ACB and does not trigger the LCGE — so if one spouse transfers shares to the other as part of equalization, the LCGE is preserved for the receiving spouse on eventual sale. This is a legitimate planning lever: transfer the shares to the lower-income spouse, who then sells and claims the LCGE.
Question: How is self-employment income treated in an Ontario divorce equalization?
Answer: Self-employment income itself is not directly equalized — the Ontario Family Law Act equalizes net family property (assets minus debts), not income. However, self-employment income feeds into equalized assets: RRSPs funded by self-employment income, corporate retained earnings, investment accounts, and real property purchased with business profits are all included in the NFP calculation. If a self-employed spouse earned $750K/year and retained $300K inside a corporation, that $300K of corporate value is part of their NFP. The valuation date is the date of separation, not the date of divorce — so income earned after separation does not enter the equalization.
Question: Can I spread my equalization payment over multiple years to reduce tax in Ontario?
Answer: Yes. Under section 7(1) of the Family Law Act, the court can order equalization to be paid in installments over up to 10 years if immediate payment would cause undue hardship. Even without a court order, spouses can agree to installment payments in their separation agreement. The tax benefit is significant: spreading a $375K equalization payment across 3 years keeps roughly $125K per year in the 44-48% bracket instead of pushing the full amount into the 53.53% bracket. The paying spouse saves approximately $20,000-$35,000 in tax over the installment period. The receiving spouse should negotiate interest on the outstanding balance (CRA prescribed rate is a common benchmark) to avoid a time-value loss.
Question: Is spousal support tax-deductible for a self-employed payer in Ontario?
Answer: Yes — periodic spousal support payments that meet the requirements of ITA s. 56.1(4) are deductible by the payer and taxable to the recipient. The payments must be periodic (not lump-sum), made under a written separation agreement or court order, and the spouses must be living apart. For a self-employed payer in the 53.53% bracket paying a recipient in the ~30% bracket, the tax arbitrage is substantial: every $10,000 of spousal support saves the payer ~$5,353 in tax and costs the recipient ~$3,000 in tax — a net household saving of ~$2,353 per $10,000. Lump-sum spousal support is NOT deductible unless specifically structured as commuted periodic payments under a court order.
Question: What happens to my CCPC retained earnings in a divorce in Ontario?
Answer: Corporate retained earnings in a Canadian-Controlled Private Corporation (CCPC) are included in the NFP calculation through the value of the shares. If you own 100% of a CCPC with $500K in retained earnings and $250K in other corporate assets, the shares are valued at approximately $750K for equalization purposes — subject to a corporate valuation that may apply discounts for minority interest, marketability, or redundant assets. The retained earnings do not need to be extracted from the corporation to be equalized; the share value captures them. However, the method of eventually extracting those earnings (salary vs. dividend vs. capital dividend) determines the personal tax cost — and that tax cost should be factored into the equalization as a notional liability against the share value.
Question: How are the Spousal Support Advisory Guidelines (SSAG) applied to self-employment income in Ontario?
Answer: The SSAG use gross income as the starting point. For self-employed individuals, this means total business revenue minus reasonable business expenses — essentially line 15000 of the T1 (net business income) plus any add-backs for personal expenses run through the business (personal vehicle, home office above CRA guidelines, meals/entertainment). Courts routinely add back discretionary expenses that reduce reported income but benefit the owner personally. On $750K of gross self-employment income with $200K in business expenses, the SSAG income is $550K. The mid-range spousal support for a 15-year marriage with no children at home would be roughly $8,000-$12,000/month — which the payer deducts at 53.53% and the recipient includes at their lower rate.
Question: Can I use my Lifetime Capital Gains Exemption to reduce tax when selling business shares in a divorce?
Answer: Yes — if the shares qualify as Qualified Small Business Corporation (QSBC) shares under s. 110.6 of the ITA. The 2026 LCGE is approximately $1.25M (indexed annually). On a $750K share sale, the entire gain could be sheltered if the three QSBC tests are met: (1) 90% of corporate assets used in active business at time of sale, (2) 50%+ active-business asset test for the prior 24 months, and (3) shares held by the individual for 24+ months. A spousal transfer under s. 73(1) rolls over at ACB and does not trigger the LCGE — so if one spouse transfers shares to the other as part of equalization, the LCGE is preserved for the receiving spouse on eventual sale. This is a legitimate planning lever: transfer the shares to the lower-income spouse, who then sells and claims the LCGE.
This is the kind of decision where a fee-only CFP can pay for itself in tax savings alone.
Life Money's advisors offer a flat-fee 90-minute consultation that walks through your specific numbers — CCPC extraction strategy, RRSP rollover, spousal support tax arbitrage, and installment structuring. One session. No AUM fees. No ongoing commitment.
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