ESTATE FREEZE (PG. 299-319)

Question 1

ESTATE FREEZE

Answer 1

To cause some or all of the future growth on the assets to accrue to another individual (capping the accrued income tax liability associated with those assets)

Question 2

FREEZOR

Answer 2

Person who owns significant assets that are growing in value

Question 3

RECIPIENT

Answer 3

Person(s) who will benefit from the freeze by gaining entitlement to the future growth component

Question 4

SECTION 85 ELECTION

Answer 4

Freezor transfers the shares of the corporation (opco) to another corporation (holdco), taking back fixed-value retractable redeemable preferred shares of the new corporation (holdco) in exchange

Question 5

SECTION 86 REORGANIZATION OF CAPITAL

Answer 5

Freezor excahnges common shares of the corporation (opco) for fixed-value retractable redeemable preferred shares of the corporation (opco)

Question 6

STOCK DIVIDEND FREEZE

Answer 6

The freezing of a corporation

Question 7

PARTIAL FREEZE

Answer 7

Freezing the value of the current asset and subscribing to some of the growth shares along with the other intended participants

Question 8

SYSTEMATIC REDEMPTION

Answer 8

When a freezor decides to manage his/her income by requesting that dividends be paid on the preferred shares, under which some of the freezor’s fixed-value retractable redeemable preferred shares are redeemed annually.