Corporate wealth transfer


Are you aware of the tax implications of accumulating passive income? A tax-exempt life insurance policy may help you efficiently transfer corporate assets to loved ones.


Helen is a registered business owner in Canada. Her company is successful, so revenues are exceeding expenses, and retained earnings are accumulating. Because Helen is conservative in nature, she invests her retained earnings in conservative investments. Her accountant advised against accumulating passive income in her company due to tax implications, and Helen is concerned her assets may erode over time from these taxes, reducing her heirs’ possible inheritance.

So Helen’s investment advisor and her estate planning specialist at RBC Wealth Management Financial Services spoke with her about a solution called the corporate wealth transfer, a tax-exempt life insurance policy purchased on the life of the shareholder. When this strategy is implemented, the company will be the owner and beneficiary of the policy. When Helen passes away, the proceeds could flow into a Capital Dividend Account, or CDA, and her estate may receive a tax-free benefit from her corporation. Under some conditions, this may help her avoid tax erosion and thereby maximizing the value of Helen’s estate. Talk to a life-licensed advisor or an estate planning specialist today to learn more about the corporate wealth transfer strategy.

This video and its content is provided by RBC Wealth Management for the general guidance and benefit of RBC Dominion Securities Inc. (“RBC DS”) and RBC Phillips, Hager & North Investment Counsel Inc. (“PH&N IC”), and is intended for information purposes only. The term “RBC Wealth Management Advisor” means an RBC DS Investment advisor or a PH&N investment counsellor and does not include advisors with Royal Trust or Private Banking.

The comments contained in this video are general in nature, and do not constitute legal, investment, trust, estate, accounting or tax advice. Insurance products are offered through RBC Wealth Management Financial Services Inc. (“RBC WMFS”), a subsidiary of RBC DS.* RBC WMFS is licensed as a financial services firm in the province of Quebec. RBC DS, RBC WMFS and Royal Bank of Canada are separate corporate entities which are affiliated. *Member – Canadian Investor Protection Fund. RBC Dominion Securities Inc. and RBC WMFS are member companies of RBC Wealth Management, a business segment of Royal Bank of Canada. Please visit for further information on the entities that are member companies of RBC Wealth Management. Trademark(s) of Royal Bank of Canada. Used under license. © 2023 Royal Bank of Canada. All rights reserved.