Meet Paul
Paul is a successful 45-year-old business owner who runs a marketing agency. He hoped to retire in five years by selling his business.
His ultimate goal is to provide a comfortable life for himself and his family. They want to travel as they please and purchase two vacation properties to enjoy.
With his business valued at $6,000,000, it was extremely important to keep as much profit in his pocket as possible.
Paul came to us with these big challenges:
- Optimize his corporate structure to maximize the sale of his business and minimize the tax burden
- Retire early without worrying about compromising his desired lifestyle
How Ocean 6 Helped Paul Achieve His Dream Retirement
To ensure Paul achieved his goal of early retirement in the most tax-efficient way, we used strategies that maximized the Lifetime Capital Gains Exemption.
The first step was to restructure his corporation by establishing a family trust and holding company:
- Set up the family trust: A family trust was set up with him, his wife, and their two children as the beneficiaries. When Paul sold his company, he was able to use his and his family’s Lifetime Capital Gains Exemptions (LCGE) to allow $4,000,000 of his sales profit to be exempt from tax.
- Set up the holding company: A holding company was created and set up as a beneficiary of the family trust. This allowed Paul to funnel presale profits through the trust and invest them inside his holding company to ensure his operating company only had active income sources, making it more seamless when he sold it.
The Impact
By optimizing how gains were received and taxed, Paul significantly reduced his tax burden when he sold his business. The new corporate structure saved Paul $1,000,000 in taxes.
Paul retired early with peace of mind, knowing he would be financially secure for the rest of his life. He now enjoys the fruits of his labour, travelling with his family and spending time doing the things he loves.
He achieved his goal of owning two vacation properties—a beachfront property in Mexico and a serene cottage on Vancouver Island.
Beyond the initial milestones, we continuously work with Paul to maximize his wealth, strategizing ways to make his money work for him passively. Our ongoing guidance ensures his future remains secure in his golden years, and he doesn’t have to worry about anything financial. It’s incredibly fulfilling to hear all about Paul and his family’s adventures and travel stories!
