FCA
FIRM CAPITAL AMERICAN REALTY PARTNERS CORP
stock CVE

Everything said here is not legal or financial advice. Please do not use anything I’ve said to take action in the real world. While what I am suggesting is theoretically possible at law, it is not something the court would take kindly to and not something I would ever suggest anyone, no matter how knowledgeable or sophisticated attempt, as it is very likely to be found as tax avoidance or tax fraud.
Now to the dumb shit:
It’s largely using a trust and avoiding the 21 year disposition rule by acquiring trusteeship simultaneously to beneficiary status, or full legal title without the effective disposition of trust property, and thus without taxation, at year 20. While trusts are taxed in Canada as if they are a separate individual to the trustee, beneficiary, and settlor, taxes on dividend reinvestment plans are treated as capital gains based on an adjusted cost base of the investment paid upon sale, rather than upon the dividend earnings themselves. Therefore, in theory, since the trust’s owing tax burden cannot be placed upon the beneficiary or the trustee, when you acquire both trusteeship and beneficiary status, thus gaining full equitable and legal title to the trust property, your cost basis for the purpose of capital gains is whatever the current value of the trust property is and is not subject to the lower cost basis of, and thus higher capital gains accrued by, the trust.
The real issue is that this largely violates the purpose of trust law and is clearly a scheme to avoid taxation. The FCA has been pretty clear that using structures like what I’ve suggested to avoid taxes will likely always lead to it being treated as just that, tax avoidance. That is why the other person would be absolutely necessary. You would need to set up a trust instrument such that the trustee, say P1, can assign trusteeship in its entirety should you believe yourself unable to carry out the duties of trustee appropriately. Either P1, the trustee, or P2, the beneficiary, can be the settlor, but P1 must be the one to transfer trusteeship to P2 through a valid provision in the trust instrument, as P2 transferring beneficiary status to the trustee is much more complicated and would be more difficult to justify in equity. Thus you would need to create a valid provision under which the trustee can unilaterally transfer trusteeship to anyone, including the beneficiary, that doesn’t result in disposition, for a reason that they can justifiably argue at law, and that would allow for the reasonable assertion that the only person the trustee could reasonably transfer the trusteeship to is the beneficiary, without it being obvious that such a provisions was designed solely for this purpose.
To anyone else reading: none of this is a recommendation for any of this. This is likely tax fraud. Do not do it. The comment to which I am replying is suggesting a much better way of limiting tax on dividends for literally anyone.

Everything said here is not legal or financial advice. Please do not use anything I’ve said to take action in the real world. While what I am suggesting is theoretically possible at law, it is not something the court would take kindly to and not something I would ever suggest anyone, no matter how knowledgeable or sophisticated attempt, as it is very likely to be found as tax avoidance or tax fraud.
Now to the dumb shit:
It’s largely using a trust and avoiding the 21 year disposition rule by acquiring trusteeship simultaneously to beneficiary status, or full legal title without the effective disposition of trust property, and thus without taxation, at year 20. While trusts are taxed in Canada as if they are a separate individual to the trustee, beneficiary, and settlor, taxes on dividend reinvestment plans are treated as capital gains based on an adjusted cost base of the investment paid upon sale, rather than upon the dividend earnings themselves. Therefore, in theory, since the trust’s owing tax burden cannot be placed upon the beneficiary or the trustee, when you acquire both trusteeship and beneficiary status, thus gaining full equitable and legal title to the trust property, your cost basis for the purpose of capital gains is whatever the current value of the trust property is and is not subject to the lower cost basis of, and thus higher capital gains accrued by, the trust.
The real issue is that this largely violates the purpose of trust law and is clearly a scheme to avoid taxation. The FCA has been pretty clear that using structures like what I’ve suggested to avoid taxes will likely always lead to it being treated as just that, tax avoidance. That is why the other person would be absolutely necessary. You would need to set up a trust instrument such that the trustee, say P1, can assign trusteeship in its entirety should you believe yourself unable to carry out the duties of trustee appropriately. Either P1, the trustee, or P2, the beneficiary, can be the settlor, but P1 must be the one to transfer trusteeship to P2 through a valid provision in the trust instrument, as P2 transferring beneficiary status to the trustee is much more complicated and would be more difficult to justify in equity. Thus you would need to create a valid provision under which the trustee can unilaterally transfer trusteeship to anyone, including the beneficiary, that doesn’t result in disposition, for a reason that they can justifiably argue at law, and that would allow for the reasonable assertion that the only person the trustee could reasonably transfer the trusteeship to is the beneficiary, without it being obvious that such a provisions was designed solely for this purpose.
To anyone else reading: none of this is a recommendation for any of this. This is likely tax fraud. Do not do it. The comment to which I am replying is suggesting a much better way of limiting tax on dividends for literally anyone.