Estate Freeze Strategies for BC Business Owners

Lock in today's value, shift future growth to the next generation, and plan ahead for the eventual tax liability.

When a BC business owner dies, the CRA generally treats their shares as sold at fair market value, which can trigger capital gains tax on any accrued growth. An estate freeze locks in today's value and shifts future growth to the next generation or a family trust. Corporate-owned life insurance is one way, among others, to help fund the resulting tax liability so the business does not need to be sold or leveraged to pay it.

GOALD is licensed in British Columbia and meets clients by appointment at partner and PPI boardrooms or by video — we are not a staffed retail branch or office.

Why Estate Freezes Are Worth Considering in BC

Appreciating BC Businesses

BC's technology, real estate, and professional services sectors have produced many rapidly appreciating private companies. Freezing value now stops future growth from adding to the eventual deemed disposition liability, while that growth accrues instead to the next generation.

BC Probate on Personal Assets

BC charges probate fees of roughly 1.4% on estate assets over $50,000 when a grant of probate is applied for. This is separate from, and in addition to, any capital gains tax triggered at death, and freeze planning does not eliminate probate on assets held personally.

Funding the Frozen Liability with Insurance

Once a freeze crystallizes a known future tax liability, corporate-owned life insurance can be sized to help fund it. Proceeds paid to the corporation credit the CDA (death benefit less adjusted cost basis), potentially supporting a tax-free capital dividend where a valid election is made.

BC Estate Planning Landscape

British Columbia does not levy a separate provincial estate or inheritance tax, but the federal deemed disposition rules at death and BC's probate fee regime both apply. BC's Wills, Estates and Succession Act (WESA) also introduces considerations such as wills variation claims that can affect business succession planning. An estate freeze is typically implemented with a tax lawyer and accountant, with insurance considered as one funding option for the resulting liability.

• Capital Gains Inclusion Rate: 50%
• BC Probate Fees: ~1.4% over $50K
• Lifetime Capital Gains Exemption (2025): ~$1.25M
• BC Top Personal Rate: 53.50%

How GOALD Supports Estate Freezes in BC

• Business Valuation Coordination — We work alongside your valuator to help establish the current fair market value of your shares.
• Freeze Structure Support — We support your tax lawyer's design of the freeze (share exchange or new share class), factoring in BC-specific considerations.
• Insurance Funding Options — We model insurance coverage options sized to the crystallized tax liability using a current carrier illustration.
• Succession Coordination — We coordinate with your existing advisors on how the freeze and any insurance fit within your broader succession and estate plan.

Related planning questions in British Columbia

• GOALD in Vancouver — Meet with us by appointment in the Lower Mainland.
• Estate Freeze in Alberta — How this strategy compares in Alberta.
• Estate Freeze in Ontario — How this strategy compares in Ontario.
• Estate Freeze overview — A general explanation of how freezes work.
• Succession Planning — Broader considerations for transferring a business.
• Buy-sell agreements — Funding options for co-owner transitions.
• Capital Dividend Account — How the CDA credit and election work.

Frequently asked questions

What is an estate freeze?

An estate freeze is a technique where you exchange your current common shares for fixed-value preferred shares, locking in today's value for tax purposes. New common shares, often of nominal value, are issued to your children or a family trust, so future growth accrues to them rather than adding to your eventual tax liability.

How can insurance help fund the tax from an estate freeze in BC?

Once a freeze crystallizes a known tax liability, a corporation may purchase a life insurance policy sized to help fund that liability. On death, proceeds paid to the corporation credit the CDA (proceeds less adjusted cost basis), and a valid election can allow a capital dividend to be paid to shareholders without personal income tax, subject to residency and other facts.

Does BC have an estate tax?

No separate provincial estate or inheritance tax exists in BC. However, federal deemed disposition at death and BC's probate fees (roughly 1.4% over $50,000 of estate value, when a grant of probate is applied for) both apply and should be planned for separately.

Who can help coordinate an estate freeze and insurance funding in BC?

GOALD & Co works alongside your accountant and lawyer to model insurance funding options once a freeze structure has been designed.

Sources and tax notes

• Ontario Retail Sales Tax Act
• CRA T2 Corporation Income Tax Guide, Chapter 4
• CRA: Passive investment income and the small business deduction
• CRA Income Tax Folio S3-F2-C1: Capital Dividends
• CRA: Capital dividend accounts (digital services)
• Ontario Estate Administration Tax
• Alberta court and surrogate fees
• Alberta taxes and levies overview
• CRA: What's new for corporations

This page is general information only and is not tax or legal advice. Tax rates, thresholds, and rules described here depend on your specific facts and the applicable tax year, and are subject to change. Please coordinate with your own accountant and lawyer before implementing any strategy. Life insurance policy values shown or discussed are illustrated and are not guaranteed unless expressly stated as guaranteed in the insurance contract.

Last reviewed: August 2026