Farm Transfers Under the Income Tax Act: Planning for the Next Generation (Ep. 36)
Farm succession planning is not just about who gets the land; it is about how to transfer it without creating an unmanageable tax bill. This episode explains why farm property is treated differently under the Income Tax Act and how those differences can shape estate and succession decisions.
In this episode, Frankie and Sarah are joined by Jamie Lee, Tax Manager at Baker Tilly Cadian, to walk through the unique tax rules that apply to qualifying farm property in Canada. From rollover provisions to the lifetime capital gains exemption, they break down what farm families need to understand before transferring property to the next generation.
What to expect:
- Why farm property rollovers extend beyond spouses to children, grandchildren, and great-grandchildren
- How transferring property between cost and fair market value can create planning flexibility
- What the “principally used” test means and why 50 percent matters
- Key differences between pre 1987 and post 1987 capital gains exemption rules
- How the gross revenue test can complicate eligibility
- Why rising land values create liquidity concerns at death
- How promissory notes are often used in farm transfers
- The 36-month holding rule and why timing matters
- Additional considerations, including alternative minimum tax, OAS clawback, and potential HST implications
- And more!
Connect with Frankie Loreto and Sarah Netley:
- Courtice.BakerTilly.ca
- LinkedIn: Baker Tilly Canada
- LinkedIn: Frankie Loreto
- LinkedIn: Sarah Netley
- Call: (905) 579-5659
About our Guest:
Jamie Lee is a Tax Manager at Baker Tilly Cadian with a growing focus on farm taxation and succession planning. Coming from a farming background herself, she brings both personal understanding and professional expertise to her work with farm clients.
Jamie Lee regularly advises on complex farm tax matters, including rollover provisions, capital gains exemption planning, and intergenerational transfers. She works closely with farm families to help them navigate evolving tax rules while supporting long term continuity and thoughtful succession strategies.
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