The spread of COVID-19 is having a considerable negative effect on the global economy. Several tax planning strategies adapted to the current situation can be considered in order to mitigate the impact. Tax planning for individuals helps to (i) reduce the taxes payable upon death, (ii) encourage intergenerational business transfers, and (iii) maximize the use of the capital gains deduction, through a trust or otherwise. For businesses in the current economic crisis, creativity and strategic vision are needed. In this context, certain tax plans will allow businesses to (i) maximize liquidity, (ii) reduce a corporate group’s taxes payable in the short term, (iii) optimize the use of losses, and (iv) bring about major tax savings in the long term. Here are a few examples of tax plans that are particularly appropriate for the current situation: Employee stock option plans Reviewing strike prices Strategies for using the capital dividend account Strategies for using losses within a corporate group, including: Intragroup management fees Loans between corporations Amalgamation or liquidation of business corporations Deferral of taxes on imports Recovering the GST/QST on bad debts Strategies to increase the fiscal cost of certain corporate assets and shares Estate freeze in order to lower taxes upon death Estate thawing and refreezing Applicable to a previous freeze whose value exceeds the current value Planning with regard to the rule of the average cost of identical properties Income splitting Leaving Canada Dismantling or creating legal entities to facilitate tax planning These plans are particularly effective in a context of economic downturn and a decrease in the fair market value of investments and assets. It is therefore important to act quickly. Our taxation team is available to answer all of your questions about establishing a tax plan to suit your needs.
- Québec, 2011
Audrey Gibeault is a partner in the Business Law Group and head of the tax team. Her practice focuses primarily in tax law. In addition to being a lawyer and having a master’s degree in taxation, she is also a chartered accountant, giving her a much broader perspective as a multi-disciplinary advisor. As a legal partner and trusted business advisor, she assists clients in planning and implementing various complex and innovative commercial, corporate and tax structures. Her clients are loyal to her and entrust her with their most important transactions, including acquisitions, the sale of their businesses, implementation of profit-sharing plans for their employees, creation of discretionary family trusts and estate planning.
Because of her natural entrepreneurial spirit and strong educational skills, Audrey is very good at advising senior executives and entrepreneurs and assisting them in achieving their business objectives. She makes use of her extensive expertise in law, accounting, taxation and knowledge of market trends when negotiating and implementing transactions, strategic alliances and commercial agreements for her clients.
Audrey also has good oratorical skills, making her an outstanding speaker. She has a passionate personality and a very practical side, enabling her to give effective and persuasive advice.
- Tax advisor in the creation of three private Canadian infrastructure investment funds and a U.S. infrastructure investment fund established as public-private partnerships managed by Fiera Axium Infrastructure and the closing of subscriptions in the capital of those funds totalling more than $1 billion
- Advisor to the Black Diamond Capital Management private investment fund in the asset acquisition of the White Birch Paper company (transaction valued at $236 million) and the establishment of their tax affairs in Québec including corporate taxes, GST, QST, and payroll deductions
- Tax advisor to the CH Group (owner of the Montréal Canadiens) regarding its indirect acquisition of the share capital of Équipe Spectra and subsidiaries (which operate Spectra Musique, the Metropolis concert hall in Montréal, and Spectra Marketing). Équipe Spectra developed the Montréal International Jazz Festival, the Francofolies de Montréal, and Montréal en lumière.
- Represent foreign clients wishing to do business in Canada
- Advise a large SME regarding the restructuring of its activities and the optimization of its tax structure, including the creation of a trust
- Represent several U.S. companies doing business in Canada or acquiring companies
- Advisor in the reorganization of family businesses to transfer them to the next generation or to members of the management team
- Represent several clients and a large municipality in voluntary disclosure to rectify the tax situation of taxpayers
- Advise a group of Korean companies in dismantling their Canadian structure using a tax “bump”
- Author, “Unexpected Application of Part XII.2 Tax to a Canadian Personal Trust,” Canadian Tax Focus, May 2013
- Coauthor, “Règles canadiennes qui s’appliquent à des societies canadiennes faisant affaire à l’étranger”, APFF, Montréal, 2012
- Coauthor, “Financement d’opérations à l’étranger”, 2010 Journée d’études fiscales, Association canadienne d’études fiscales, 2010
Seminars and Lectures
- Speaker on the topic of "L'essentiel des aspects légaux et fiscaux", Institut de leadership, November 10, 2020
- Course entitled "Aspects juridiques et fiscaux visés au transfert d’entreprise” given at the Centre de transfert d’entreprise du Québec, 2019
- Acted as an expert on the panel organized by the Centre de transfert d’entreprise du Québec and the Institute for Leadership addressed to participants in the purchase and sale of businesses to enable them to obtain a certificate in the transfer of businesses, 2019
- Speaker on several occasions on “Pièges à éviter entourant la fiscalité des employés à commission”, RBC financial planners convention, 2019
- Co-speaker for a presentation entitled “Nouveautés en droit corporatif ” at the symposium organized by Wolters, 2019
- Speaker for the Groupement des chefs d’entreprises du Québec on tax planning for purposes of the sale of a business, 2 seminars, 2019
- Speaker on the topic of “5 choses à savoir en démarrage et en croissance” on the main stage of Expo Entrepreneurs, 2019 edition
- Seminar for the organization Leadership au Féminin addressed to young female lawyers, 2019
- Speaker on the topic of “Planification successorale et transition de l’entreprise : enjeux financiers, fiscaux et familiaux”, Groupement des chefs d’entreprise du Québec, 2018
- Co-speaker on the topic of “La fiducie familiale et autres nouveautés – qu’en reste-t-il du budget Morneau?” for the Montreal CPA Group, 2018
- Co-speaker on the topic of “Transfert et relève de moyennes entreprises”, 12th M&A Club Forum, 2018
- Co-speaker on the topic of “Pièges à éviter en matière fiscale pour un avocat en droit des affaires”, Symposium on corporate law, 2017
- Speaker on the topic of “Les lectures incontournables : Start with why: How great leaders inspire action”, Association of Quebec Women in Finance (AFFQ), 2017
- Co-speaker on the topic of “Fiscalité de l’entreprise en croissance”, M&A Forum, 2017
- Co-speaker on the topic of “Nouveautés fiscales en matière d’achat/vente d’entreprise?”, M&A Club, 2017
- Speaker on the topic of “Commencez par le pourquoi”, Convention of the Association of Quebec Women in Finance (AFFQ), 2017
- Co-speaker on the topic of "Erreurs et pièges à éviter en matière fiscale” webinar addressed to managers working for Québec municipalities, 2013
- Speaker on the topic of “Règles canadiennes qui s’appliquent à des sociétés canadiennes faisant affaire à l’étranger”, Convention of the Association de planification fiscale et financière (APFF), 2012
- The Canadian Legal LEXPERT® Directory in the field of Corporate Tax, 2021
- Lexpert 2020 Rising Stars Award
- L.L.B., Université de Montréal, 2010
- M.A. in taxation, Université de Sherbrooke, 2009
- Graduate diploma in public accounting, HEC Montréal, 2007
- Chartered Accountants' Uniform Final Examination, 2007
- B.A. in business administration, HEC Montréal, 2006
Boards and Professional Affiliations
- Member of the Board of Directors of M&A Club,
- Member and collaborator of the Professional development committee of the Association of Quebec Women in Finance, since 2014
- Founding member of the Young Philanthropists Circle of the Montreal Museum of Fine Arts, 2012-2013
- Member of the Ordre des comptables professionnels agréés du Québec (CPA-CA), since 2010
- Member and collaborator of the Succession committee of the Association de planification fiscale et financière (APFF), 2010-2016
- Member of the Canadian Tax Foundation (CTF)
- Member of the Young Directors Committee of the Institute for governance of private and public organizations (IGOPP)
- Member of the Board of Directors of the Montreal Youth Symphony Orchestra, 2011-2013
- Member of the Ordre des comptables professionnels agréés du Québec (CPA-CA) since 2010
Nowadays, many employers are seeking out forms of compensation that will help motivate and retain key employees. More and more, employers are opting for one of a variety of company stock ownership profit-sharing plans to reach this objective. Employers who wish to implement this type of structure must ensure that the one they choose most adequately meets their objectives. In this context, employee benefit trusts make it possible to reach objectives that are common to many employers while providing tax treatment that is often much more beneficial to employees. Type of Profit-Sharing Plan With this type of profit-sharing plan, employers must set up a trust and designate employees as beneficiaries. Subsequently, the trust subscribes for or purchases shares of the company. The trustees of the trust (usually the shareholders of the company) then hold these shares acquired for the employees. The deed of trust must include the terms that govern the holding of the shares by the trustees. For instance, it is important to determine which employees will be the beneficiaries of the trust, at which point(s) in time and under which conditions the shares will be designated to the employees, and under which circumstances the company would be able to repurchase the shares. Once the trust is set up, any new employee designated as such by the company may become a beneficiary of the trust. More Flexibility for Employers Employee benefit trusts provide employers with many benefits. First and foremost, employers have more control with an employee benefit trust than with an employee stock option plan (ESOP). Contrary to an ESOP, with an employee benefit trust, employees do not personally hold the company’s shares. Rather, the trustees are the ones holding said shares. As such, employees do not need to attend shareholders’ meetings or have access to the company’s financial information. Furthermore, the fact that the company’s shares are not personally held by the employees prevents problems should a misunderstanding arise with a profit-sharing employee. Furthermore, since the employees are not immediately shareholders of the company, the moment where the employees have to be part of the shareholders’ agreement of the company is postponed to a later date. This type of plan also gives employers much more flexibility in terms of selecting the employees who will become shareholders. If the deed of trust is drafted judiciously, there is no need to finalize the selection of employees who will become shareholders at the time that the trust is set up. Thus, the trust may continue to hold the shares of the company until such time as the employees who will become shareholders are chosen and the necessary conditions for the allotment of shares are met. It is therefore possible to postpone said selection until the sale of the company. In this case, the chosen employees may avail themselves of their capital gains deduction and therefore benefit from tax treatment that is much more advantageous than, say, a bonus at the time of sale. In addition, an employee benefit trust eliminates a common ESOP issue, which is having to frequently determine the fair market value (FMV) of the company’s shares. With an ESOP, the determination of the FMV of the shares underlying the options must be made every time ESOPs are granted in order to ensure that employees receive favourable tax treatment. As ESOPs are usually granted to many shareholders at various points in time over a number of years, the FMV of the company’s shares must be determined repeatedly. An employee benefit trust eliminates the need for this exercise, as the company’s FMV will only have to be established when the shares are acquired by the trust. Benefits for Employees Not only is an employee benefit trust beneficial to employers, but it also provides certain benefits to employees. Just like all other stock ownership profit-sharing plans, employee benefit trusts allow employees to benefit from the company’s future increases in value. Although employees are not shareholders of the company from the time that the trust is set up, they will benefit from all of the capital gain accrued on the participating shares that will be allocated to them by the trust. Moreover, for the purposes of certain provisions of the Income Tax Act (ITA), if a share in trust is held by a trustee, whether absolutely, conditionally or contingently, for an employee, the employee is deemed to have acquired the security at the time the trust began to so hold it. This presumption, set out in subsection 7(2) of the ITA, allows for the beginning of the computation of the two-year period following the owning of the shares, which is relevant for the employees’ eligibility to the capital gains deduction as well as to the deduction in computing the taxable income provided for in paragraph 110(1)(d.1) of the ITA. An employee benefit trust therefore makes certain tax benefits, such as the capital gains deduction, more accessible to employees. Lastly, an employee benefit trust provides a tax benefit to employees in cases in which the shares of the profit-sharing plan have decreased in value since they were issued. In the event that the trust disposes of the securities to the company and that the amount paid by the company to acquire, repurchase or cancel said securities does not exceed the amount that it had previously been paid, employees may deduct an amount to offset the taxed benefit, in accordance with subsection 7(1) of the ITA. Through this tax treatment, employees avoid losing capital at the time of the disposition of the securities to the company, a loss of capital that would remain unusable until employees achieve a capital gain. This scenario may occur, in particular, when an ESOP is implemented. Although an employee benefit trust provides many benefits to employees, this type of profit-sharing plan is more complex than traditional profit-sharing plans. Thus, in situations in which employers wish to share profits with a single employee, it may be appropriate to consider another type of profit-sharing plan. Out team in Taxation and Labour and Employment are ready to advise you and to assist you in implementing them.
Have you built a prosperous business through your hard work and perseverance? Are you the kind of entrepreneur who invests countless hours in growing your business? Every business owner must one day plan for the succession of his business, whether with a view to his retirement, to sell the business to a third party, or to transfer it to a family member or to the employees. In order to properly prepare for that day, it is crucial to develop a succession plan.
There is currently speculation in the media that Liberal Finance Minister Bill Morneau’s next federal budget will increase the capital gain inclusion rate from 50% to 75%.The combined marginal tax rate on capital gains is currently 26.7% for a resident of Québec. This rate would reach nearly 40% if the budget was to increase the capital gain inclusion rate to 75%. A $1,000,000 capital gain would thus generate approximately $133,000 in additional taxes. Proposed tax planning Assuming that the rumour materializes, it is possible to counter the adverse effects of such change by implementing a simple tax planning measure before the budget is tabled. The planning involves transferring assets that have appreciated in value to a corporation. Subject to certain conditions, the transfer allows for the gain to be made prior to the new rules coming into force, thus allowing the taxpayer to benefit from the current 50% inclusion rate. Such a course of action could be of interest to someone who is considering selling assets in the short or medium term. Impact if anticipated measure is not adopted Should the budget not include the anticipated change, it would be possible to reduce and even cancel the capital gain by filing rollover tax forms after the budget is released. No gain would be realized and consequently no tax would be payable. Our highly qualified tax team is available to assist you in that regard.
On June 13, 2022, Resonetics announced the purchase of the entirety of the shares of Agile MV, a Montréal-based medical device design and development contract manufacturing company. The transaction was motivated by the quality of expertise that Agile MV's team of engineers, scientists, and technicians possess throughout the entire production cycle, from initial concept consolidation to mass production. Our partner, Audrey Gibeault, had the privilege of representing the company in this major transaction that involved complex tax planning, among other things. In business law, this transaction was led by our partner Étienne Brassard. Ms. Gibeault and Mr. Étienne Brassard were mainly assisted in this transaction by Gabrielle Ahélo. They were assisted by Luc Pariseau, Sonia Guérin, France Camille De Mers, Brittany Carson, Éric Gélinas, André Vautour, Michael Pageau, Maxime Chabot and Charles-Hugo Gagné. —Agile MV is a Quebec-based medical device design and development contract manufacturing company. It specializes in the development of minimally invasive diagnostic and therapeutic medical devices in the following areas: cardiac electrophysiology, interventional cardiology, interventional radiology, interventional pulmonology, interventional gastroenterology, interventional pain management and interventional neurology.Resonetics specializes in advanced engineering and manufacturing solutions for the life sciences industry, laser cutting, centerless grinding, nitinol processing, thin-wall stainless steel and precious metal tubing, photochemical machining, microfluidics, sensor solutions and medical energy.
Lavery is proud to announce that 29 partners are ranked among the leading practitioners in Canada in their respective practice areas in the 2021 edition of The Canadian Legal Lexpert Directory. The following Lavery partners are listed in the 2021 edition of The Canadian Legal Lexpert Directory: Asset Securitization Brigitte Gauthier Aviation (Regulation & Liability) Louis Charette Class Actions Myriam Brixi Louis Charette Construction law Nicolas Gagnon Corporate Commercial law Jean-Sébastien Desroches Yves Rocheleau André Vautour Corporate Finance & Securities Josianne Beaudry René Branchaud Corporate Tax Audrey Gibeault Employment Law Marie-Josée Hétu, CIRC Guy Lavoie Family Law Elisabeth Pinard Infrastructure Law Jean-Sébastien Desroches Intellectual Property Chantal Desjardins Isabelle Jomphe Alain Y. Dussault Insolvency & Financial Restructuring Yanick Vlasak Labour Relations Michel Desrosiers Richard Gaudreault Simon Gagné Danielle Gauthier, CHRP Michel Gélinas Marie-Josée Hétu, CIRC Guy Lavoie Zeïneb Mellouli Litigation - Commercial Insurance Bernard Larocque Judith Rochette Litigation - Product Liability Louis Charette Mergers & Acquisitions Jean-Sébastien Desroches Mining Josianne Beaudry René Branchaud Sébastien Vézina Occupational Health & Safety Éric Thibaudeau Property Leasing Richard Burgos Workers' Compensation Guy Lavoie Carl Lessard Éric Thibaudeau The Canadian Legal Lexpert Directory is the most comprehensive publication to legal talent in the country and it identifies leading practitioners in over 60 separate practice areas and leading law firms in over 40 practice areas. It is a reference guide for Canadian and foreign corporate counsels and law firms in need of specialized legal services in Canada. For more information, please visit Lexpert’s website at: http://www.lexpert.ca/directory.
On November 16, 2020, Audrey Gibeault, a partner in the firm’s Business Law group, received the Rising Stars Leading Lawyers Under 40 award from Lexpert, in recognition of her contribution to the growth of key players in the economy. This award pays tribute to lawyers under 40 who are considered rising stars in Canada’s legal community. The winners are selected based on rigorous and well-defined criteria: professional achievements, leadership, contribution to the profitability of the firm, keen business sense, vision, training and team work. In addition to being a lawyer and having a Master’s degree in Taxation, she is also a chartered accountant, giving her a much broader perspective as a multi-disciplinary advisor. As a legal partner and trusted business advisor, she assists clients in planning and implementing complex and innovative commercial, corporate and tax structures. Her clients are loyal to her and entrust her with their most important transactions, including acquisitions, the sale of their businesses, implementation of profit-sharing plans for their employees, creation of discretionary family trusts and estate planning.
Lavery is pleased to announce that Audrey Gibeaut, Justin Gravel, Myriam Lavallée, Marilyn Paré and Virginie Simard have been appointed Partners of the firm. Audrey Gibeault is a member of the firm’s Business Law group and practices tax law. From family-owned businesses to multinationals, she provides companies with advice in connection with reorganizations, corporate acquisitions and sales, but also in regards to developing several private investment funds, including the legal structures to be put in place in order to welcome investors to Canada who are residents and non-residents alike. Justin Gravel is part of the firm’s Litigation and Conflict Resolution group and he practices primarily in the bankruptcy and insolvency, bank law and construction law sectors. He is frequently called on to represent bankruptcy trustees, financial institutions and various construction sector stakeholders before all of the province’s law courts. Myriam Lavallée focuses her practice on labour and employment law, administrative law as well as human rights law. She advises and represents numerous companies in a variety of sectors in connection with individual working relations and collective labour relations. She has specific expertise in the childcare services sector. Marilyn Paré is a member of Lavery’s Business Law group and practices in the areas of transactional law, commercial law, financing as well as corporate reorganizations. She frequently advises companies in drafting and negotiating numerous types of commercial or corporate agreements, such as sales agreements and shareholder agreements. Virginie Simard works with Lavery’s Litigation and Conflict Resolution group. Virginie focuses her practice primarily in the areas of hospital liability, civil and professional liability, director and officer liability, as well as insurance law. Virginie represents insurers, hospital centres, clinics and youth centres before civil courts, in arbitration matters, as well as in connection with coroners’ inquests.