Consultant Saves with Real Estate Portfolio

How Strategic Life Insurance Saved a Consultant from a Massive CRA Penalty

Tax Planning
July 03, 2025•2 min read
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Overview

Background:

Our client, a successful independent consultant and avid real estate investor, faced significant tax challenges. His passive income from real estate was nearing CRA thresholds, threatening his eligibility for the small business deduction. Without proper restructuring, he risked substantially higher taxes, jeopardizing his dream of early retirement and his family’s financial security.

Goals:

  • Preserve eligibility for the small business deduction.

  • Minimize overall tax burden.

  • Continue building wealth in a tax-efficient manner.

  • Ensure a secure, tax-free legacy for his family.

Step 01: The Challenge

Navigating Passive Income Limits

The consultant's growing passive income was at risk of surpassing CRA thresholds, potentially disqualifying him from significant tax benefits. Without intervention, this would result in:

  • Loss of small business deduction, dramatically increasing taxes.

  • Reduced ability to grow corporate and personal wealth.

  • Compromised early retirement and legacy planning.

Step 02: Our Solution

Strategic Wealth Protection Plan

We implemented a customized corporate-owned permanent life insurance strategy, designed specifically to:

  • Allow tax-efficient accumulation of wealth without triggering passive income penalties.

  • Facilitate borrowing against the policy for investment opportunities.

  • Provide long-term tax-sheltered growth and flexible liquidity.

  • Establish a robust framework for generational wealth transfer.

Step 03: Results Achieved

Post-Implementation Success

With Dundas Wealth's strategy, the consultant:

  • Successfully retained the small business deduction.

  • Significantly reduced his annual tax burden.

  • Continued to grow wealth in a protected, tax-sheltered environment.

  • Secured a substantial financial legacy for his family.

  • Maintained his trajectory toward a comfortable early retirement.

Now, our client enjoys peace of mind knowing his wealth is protected, taxes minimized, and his financial goals remain firmly within reach.

Take Action

If you're a business owner or professional facing challenges due to rising passive income, Dundas Wealth can help. Discover how you can strategically reduce taxes, protect your business deductions, and grow your wealth securely for the long term.

Contact Dundas Wealth today to schedule your complimentary consultation and learn how we can help secure your financial future.

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