Intergenerational Business Transfer Calculator

Selling the business to your own kids used to cost more in tax than selling to a stranger. A genuine transfer under the current rules closes that gap.

Reading This Tool

How To Use This Calculator

Enter the sale price, cost base, and available Lifetime Capital Gains Exemption for the transfer.

A transfer that meets the immediate or gradual intergenerational business transfer conditions is treated as an arm's length sale for tax purposes, capital gains treatment and the LCGE apply. One that doesn't meet those conditions falls back to Section 84.1, recharacterized as a dividend, with no exemption available at all.

Your Inputs

Transfer Path

Sale Price Of Qualifying Shares $3,000,000

Adjusted Cost Base $200,000

Lifetime Capital Gains Exemption Available $1,250,000

Parent's Marginal Tax Rate 45.0%

The immediate path requires giving up both legal and factual control right away, with 36 months to complete the full transfer. The gradual path allows retaining legal control initially, but requires reducing combined equity and debt interest to below 30% within 10 years, with at least one child actively engaged throughout.

Tax Outcome Comparison

Tax If Treated As A Dividend (Not Qualifying)

Tax As A Genuine Intergenerational Transfer

Tax Saved By Qualifying

Tax Owing: Dividend Treatment vs. Qualifying Transfer

Dividend Treatment Qualifying Transfer

This exemption can only be used once for the same underlying business. The reassessment period extends by 3 years for an immediate transfer and 10 years for a gradual transfer, and children become jointly and severally liable for tax if the conditions ultimately aren't met. A capital gains reserve of up to 10 years is available on top of this, not modeled here.

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