The number on offer and the number you actually keep are two different numbers, and the gap is usually structural, not a surprise the CRA invented. Work through these in order and you will know which sale structure you actually have, what the lifetime capital gains exemption requires, what has to happen before the deal and not after, and where tax can still land even when everything above was done right.
What you'll be able to decide
STAGE ONE OF FOUR
Share sale and asset sale are not a matter of preference — each carries its own tax mechanics, and they pull buyer and seller in opposite directions.
Guide
Choosing between a share deal and an asset dealWhy buyers usually push for assets and sellers usually push for shares — the tax, financing and liability mechanics behind that tug-of-war.
Article
The two levels of tax on an asset sale, and the capital dividend accountIf it is an asset sale: the two levels of tax that actually apply, and the one account that lets some of the proceeds out clean.
Article
The GST/HST election on an asset saleThe election that stops the same sale tying up your cash while you wait to recover the tax paid on it.
Guide
Planning the tax on a Canadian business exitThe structural decisions that move the bill most: share vs. asset, the exemption arithmetic, and a related-party trap worth knowing before you plan around family.
STAGE TWO OF FOUR
The exemption has statutory tests, and they are not tested on the day you sign.
Definition
Qualified small business corporation shareThe specific class of share the exemption requires before it applies to anything at all.
Definition
Lifetime capital gains exemptionWhat the exemption actually shelters, and the most common ways it gets lost.
Guide
Qualifying shares for the capital gains exemptionThe three statutory tests that decide qualification, and how a redundant asset on the balance sheet can flip a pass into a fail.
Article
The 24-month rule that decides your capital gains exemptionThe test runs over the 24 months before the sale, not on closing day — plan the balance sheet that far ahead.
Ask an Expert
What can disqualify shares from the lifetime capital gains exemption?Two specific ways qualification fails even when the business itself looks clean.
STAGE THREE OF FOUR
If the balance sheet is carrying passive assets, they have to come out before closing on terms the Act sets, not the plan.
Definition
Corporate purificationWhat purification actually is, and why it has to happen before closing, not as a post-closing cleanup.
Ask an Expert
Does moving investments out before a sale protect the capital gains exemption?The cap on how much of that move is sheltered — the company’s own safe income, not the full value moved.
Case file
A stock dividend purification priced by paid-up capitalA real purification structured to stay under that cap, and the rule that priced it at a higher figure than the plan assumed.
Case file
Purification dividend limited by safe incomeA larger version of the same trap: a $9,000,000 dividend, and the excess above safe income that came back as a capital gain.
Article
The section 85 rollover explainedThe tool that often moves the purified assets without triggering a tax of its own along the way.
STAGE FOUR OF FOUR
Two real files where every prior step was done correctly, and tax still landed somewhere unexpected.
Case file
The QSBC test that looked through the holding companyA vendor sold holding-company shares and claimed the exemption — qualification turned entirely on an operating company nobody had actually tested.
Case file
A capital gains exemption that still owed taxThe exemption applied in full, and the seller still wrote a cheque, because of a tax the exemption was never designed to exclude him from.
The share-versus-asset choice this path just walked through is not really a choice at all when the target is a licensed practice — see why.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
No pitch, no listings. One email when the first report lands.
