{"id":2435,"date":"2020-07-05T17:02:00","date_gmt":"2020-07-05T17:02:00","guid":{"rendered":"https:\/\/aspenval.com\/?p=1871"},"modified":"2025-09-27T17:43:05","modified_gmt":"2025-09-27T17:43:05","slug":"family-business-valuation","status":"publish","type":"post","link":"https:\/\/aspenval.com\/ca\/family-business-valuation\/","title":{"rendered":"Covid-19: unprecedented opportunity to transition family business and save tax"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"2435\" class=\"elementor elementor-2435\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-465ac27 e-flex e-con-boxed e-con e-parent\" data-id=\"465ac27\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-cbbb0b6 elementor-widget elementor-widget-image\" data-id=\"cbbb0b6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"683\" src=\"https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1.webp\" class=\"attachment-large size-large wp-image-5346\" alt=\"\" srcset=\"https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1.webp 1024w, https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1-300x200.webp 300w, https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1-768x512.webp 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-935ddf2 elementor-hidden-desktop elementor-hidden-laptop elementor-hidden-tablet elementor-hidden-mobile elementor-widget elementor-widget-heading\" data-id=\"935ddf2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h1 class=\"elementor-heading-title elementor-size-large\"><b>COVID-19: unprecedented opportunity to transition family business and save tax<\/b><\/h1>\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-78d05d6e e-flex e-con-boxed e-con e-parent\" data-id=\"78d05d6e\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-544a5c97 elementor-widget elementor-widget-text-editor\" data-id=\"544a5c97\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t\n<p><em>2 min read.<\/em><\/p>\n\n<p>This year, COVID-19 has caused tremendous disruptions to our lives and businesses. Companies have to pivot their operations and put more efforts in planning, not only for short-term but also long-term perspectives. Family businesses start to think hard about their intended transition from the founder generation to their children.<\/p>\n\n<p>At Aspen Valuations, during the last few months we have seen a significant increase in business valuation demand for the purposes of succession and tax planning. We have seen a drop in value for many businesses. Depending on the specific sectors, many companies suffer significant operating losses in the recent months, resulting in a material drop in their current value. During this time, many family businesses execute an estate freeze. In general terms, an estate freeze is used to transfer the control of a privately-owned business between generations. If your business value is greatly reduced, this will allow the locking in of the low value today, resulting in lower capital gain taxes on death. This will also be a good planning opportunity for business owners that plan to retire outside of Canada.<\/p>\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.kroll.com\/en\/services\/valuation?utm_campaign=NA-VS-NN-NN-NN-NN-NOTAV-NASER2301GGLP+Branded+Services+VAS&amp;utm_source=paid-search&amp;utm_medium=cpc&amp;gad_source=1&amp;gclid=EAIaIQobChMIzfW317jJggMVPS2tBh3aJQJWEAAYASAAEgKY8PD_BwE\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignnone wp-image-5346 size-full\" src=\"https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1.webp\" alt=\"\" width=\"1024\" height=\"683\" srcset=\"https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1.webp 1024w, https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1-300x200.webp 300w, https:\/\/aspenval.com\/ca\/wp-content\/uploads\/2020\/07\/Familybusinessmeeting3-scaled-1-768x512.webp 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n<p>A combination of a lower business value and unprecedented low prescribed interest rates set by governments (i.e. IRS or CRA) creates an opportunity to gift or sell shares to family members. For example, in Canada, an inactive family member would need to acquire a minimum of 10% of voting shares in a company in order to receive dividends from the company as income splitting without being taxed under the Tax On Split Income (TOSI) rules.<\/p>\n\n<p>In addition, if a U.S. corporation or subsidiary is involved, gifting now when business value is low can help business owners take advantage of the federal exemption from estate and gift tax which is currently capped at $11.7 million (2021) for individuals under the Tax Cuts and Jobs Act in 2017. This exemption cap will be reverted back to $5 million by December 31, 2025 or sooner. It is highly anticipated that the exemption amount will soon be reduced to $3.5 million for estate tax and $1.0 million for gift taxes by the current administration.<\/p>\n\n<p>Is now a good time to pursue estate planning or gifting of your family business? We would love to discuss it with you. Book a<a href=\"https:\/\/aspenval.com\/contact-us\/\">\u00a0<\/a><a href=\"https:\/\/aspenval.com\/contact-us\/\" target=\"_blank\" rel=\"noreferrer noopener\">free consultation<\/a>\u00a0with us to chat more.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>COVID-19: unprecedented opportunity to transition family business and save tax 2 min read. This year, COVID-19 has caused tremendous disruptions [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5346,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","content-type":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[9,12],"tags":[],"class_list":["post-2435","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-business-valuation-insights"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.7 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Covid-19: unprecedented opportunity to transition family business and save tax - Aspen Valuations<\/title>\n<meta name=\"description\" content=\"Covid can be a great opportunity to transition a family-owned business to the next generation. 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