Estate Planning in Special Situations
CCRA Canada Customs and Revenue Agency
MRTC Marginal Rate of Tax Credit
Buy-sell Agreement: a legal contract between the partners of a partnership, among the shareholders of a corporation, or between the shareholders and the corporation, obligating the surviving party or parties to purchase the ownership interest of the deceased. The agreement can specify the purchase either at a fixed price or according to a formula developed at the time the agreement is entered.
Charitable Gift: a donation of money or other assets to a registered charity or other suitable recipients as specified by the Income Tax Act.
Cross-insurance: each partner or shareholder purchases sufficient insurance on each of his co-owner’s lives to cover the cost of purchasing the ownership interest of that partner of shareholder as covered by a buy-sell agreement.
Cross-purchase Agreement: a buy-sell agreement executed among the partners in a partnership, or among the shareholders in a corporation, obligating the surviving partners or shareholders to purchase the interest of the deceased partner or shareholder.
Crown Gifts: donations to Her Majesty in right of Canada or a province, including Crown agencies controlled by a provincial ministry.
Cultural Gifts: gifts that meet the criteria set by the Canadian Cultural Property Export Review Board, as described in the Cultural Property Export and Import Act, and that are donated to designated institutions.
Designated Person: for the purposes of the attribution rules under the Income Tax Act, includes the spouse or common-law partner of the transferor and any person under the age of 18 who does not deal at arm’s length with the transferor or who is the niece or nephew of the transferor.
Ecological Gift: a gift of land that has been certified by the Minister of the Environment to be ecologically sensitive, such that the conservation and protection of that land is important to the preservation of Canada’s environmental heritage.
Estate Freeze: a strategy designed to minimize income taxes due at death as the result of the deemed disposition of capital property, by freezing that disposition at an earlier point in time so that any future gains accrue to the intended beneficiaries.