When a parent sells the company to a corporation the children control, section 84.1 can turn the sale into a taxable dividend, unless the intergenerational-transfer exception is met. Walk the conditions with the client, see which regime is available, and show what qualifying is worth: a capital gain and the lifetime exemption instead, then turn it into a client-ready letter.
The calculation is only half the work. CodaraFlow finishes the explanation, the tables, and the client-ready letter.
The share sale itself is straightforward. The work is the conditions: assessing each one, recording the family’s facts, pricing what a failed condition would cost, and setting out commitments that run for years after closing. That is the part that overruns the fee.
Each condition is marked Met, At Risk, Not Met or Not Applicable with the family’s facts beside it, and that record is what prints. Nothing is written up a second time.
The gain with the lifetime exemption and the section 84.1 deemed dividend with its grinds come from the same figures, so pricing what qualifying is worth is not its own piece of work.
The joint election, the share and interest conditions and the multi-year commitments each regime imposes are dated from closing, so the calendar does not have to be rebuilt from the Act each time the file is picked up.
Several conditions are judgment calls rather than arithmetic, and where the family has to weigh one, the assessment and the figures are there to talk against.
The assessment is delivered as an advisory letter that records the conditions and the calendar.
This is one of the built-in calculations in CodaraFlow. Start with two questions about the control given up and the pace of the exit, walk the statutory conditions with the client, and enter the sale figures. It shows which regime is available and contrasts qualifying with the section 84.1 result.
The number is not the deliverable. In CodaraFlow the assessment drops straight into a letter section: the firm’s approved wording, the conditions table with the client’s facts, the obligations calendar dated from closing, the qualifying-versus-section-84.1 contrast, and the notes that apply, written in for you. Exported as an editable Word document on your letterhead.
The same reviewed explanation, not whatever the preparer types today.
The summary sentence adapts to the assessment: what qualifying is worth when the conditions are met, and a plain section 84.1 warning when one is not.
The conditions table, the obligations calendar, and the qualifying-versus-84.1 figures are laid out and footed for you.
Finish it in Word, on your firm’s letterhead. No proprietary format.
The assessment reflects the intergenerational-transfer rules in section 84.1. The wording is firm-editable.
On a sale of shares to a corporation the vendor does not deal with at arm’s length, section 84.1 can reduce paid-up capital and deem a dividend instead of a capital gain.
The sale is spared that treatment when the buyer is controlled by the vendor’s children, 18 years of age or older, as determined under the Act, and one of the two sets of conditions is met.
Legal and factual control passes at closing, and the conditions of subsection 84.1(2.31) run for 36 months after it.
Legal control passes at closing, and the conditions of subsection 84.1(2.32) run for 60 months after it, with the interest reduction test at ten years.
The vendor and the children jointly elect for the exception, filed by the vendor’s filing-due date for the year of the sale.
The figures are a planning illustration at the firm’s current rates, and the conditions assessment records professional judgment, not a guarantee. Several conditions run for years after closing, and a later failure can forfeit the exception retroactively. Whether the exception ultimately applies depends on the facts and remains a matter of professional judgment.
Every calculator produces a planning estimate for a qualified practitioner to review. Renshi CodaraFlow does not give tax advice.
Get a working demo account, run this calculation on a real file, and export the letter it produces.
Everything is computed from the figures you enter and assembled from your firm’s approved wording. The app never connects to AI.
Editable Word documents on your firm’s letterhead. Monthly pricing, no long-term contracts.
No. It’s one of the built-in calculations inside CodaraFlow. The assessment and the figures become a client-ready letter section, complete with the conditions table, the obligations calendar, and the notes that apply.
Both: the immediate regime under subsection 84.1(2.31) and the gradual regime under subsection 84.1(2.32). Two triage questions determine which one is available, and it walks the conditions for that regime, or compares both when both remain open.
No. It structures the conditions so you can walk them with the client and record where each one stands, then shows what qualifying is worth against the section 84.1 result. Whether the transfer qualifies is professional judgment on the facts.
Yes. Every sentence and every note is firm-editable, and can be overridden on an individual letter.
No. The app never connects to AI. Deliverables are assembled from structured facts and your firm’s approved wording.