Rollover transactions are generally done to avoid a disposition, which means an event that triggers tax. A tax is paid on the sale or disposition of an asset. There are also deemed dispositions on death or in other circumstances. Rollovers under various sections of the Income Tax Act are very common transactions done to defer the payment of tax.
PMR Law works with tax and accounting professionals to implement rollover planning techniques. We assist clients with different types of tax-free rollovers under the Income Tax Act. These transactions typically include:
- Section 51 — Transfer of exchanged capital property for shares of the same corporation
- Section 85 —Transfer of non-share property in exchange for shares for an elected amount
- Section 86 — Transfer of shares for shares of the same corporation in a reorganization
Rollover Transactions And Shares
Part of many rollover transactions is to change the attributes of shares of a company. This is done to achieve different purposes, including tax freezes. These are also done in the context of separating groups of shareholders into new corporate structures.
Our firm has helped clients throughout Alberta implement rollover solutions that follow strict legislative requirements and achieve the corporate goals of the transaction participants.
Business Growth And Development
PMR Law knows that careful documentation of rollover transactions with transfer agreements and supporting resolutions are needed to properly fall within the exacting legal requirements of the Income Tax Act..
The devil is in the details in these transactions. We have participated in a number of these transactions and draw on our in-house and external tax partners to deal with whatever challenges a transaction has to offer. We strive to ensure all documentation meets our clients’ reorganization goals and the exacting requirements of the law.
Innovative Use Of Technology
PMR Law has the forms, lawyers and knowledge of the law to implement rollover transactions.
We are able to bring our strong transaction based practice together with specialist tax advisors to implement rollover transactions with clarity and accuracy. We also use legal precedents and tax specialist software to effectively advise on the latest and best practices in the area.