An estate freeze is a legal estate-planning technique used in

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...

to lock in the current value (and tax liability) of a capital property for one person, while attributing the value of future growth of that capital property to another person. This technique provides

taxation A tax is a mandatory financial charge or levy imposed on an individual or legal person, legal entity by a governmental organization to support government spending and public expenditures collectively or to Pigouvian tax, regulate and reduce nega ...

estate planning Estate planning is the process of anticipating and arranging for the management and disposal of a person's Estate (law), estate during the person's life in preparation for future incapacity or death. The planning includes the bequest of assets to ...

and business advantages by ensuring current owners (e.g. parents) of an

asset In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...

can continue to control that asset while allowing other persons (e.g. children) to benefit from (and be liable for the taxes payable on) the increase in value of the asset after the date of the estate freeze. Practical uses of an estate freeze include transfer of control of a privately held business between generations, deferral of the taxes payable upon the disposition of the shares of that business, income-splitting between family members and protection of assets from

creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some propert ...

s.Estate freeze
Retrieved 2012-08-01. Appreciating assets may be transferred from parents to their children on a tax-deferred basis, with the parents retaining control of the assets during their lifetime.

References

Taxation in Canada {{Canada-stub