Getting the most tax free dollars from your Group and
Corporate insurance Program
Corporate Dividend Account Business Loan for Owner
age 46 is a business owner which is manufacturing and has combined
business loans for equipment and lines of credit with his bank for
the amount of $500,000, the bank has offered and asked for proof
of insurance as Barry is the key person to his company to cover this loan.
He has an option to purchase coverage through the bank or to purchase independently.
Under the current income tax act IT-430R3
it will be to Barry's advantage to purchase the coverage through
an insurance company vrs the financial institution he may be dealing
with. This would create an additional $160,000 in tax free
dollars to the remaining shareholders of the corporation, which
in this case is Barry's family. Barry
is able to do this through his Corporate
Dividend Account and his deposits into his account are
considered tax deductible
under the current income tax act IT-309R2.
Barry has considered that
for the next 20 years he will be in business, and as his business grows
he will always have need for lending money for his business, as he uses
other peoples money to make money for himself. He hopes that by the
time he is 65 the business would be sold.
Lesser premiums paid and Net Cost of Pure Insurance NCPI