Planning tools · For advisors & their clients

Invest in the holdco, or personally?

The incorporated owner's perennial question: leave business profits in the company and invest there, or pay them out and invest personally? The trade is real on both sides — deferral now versus higher investment taxes inside the corporation and a dividend bill at the end. This shows the arithmetic with your rates, not a slogan.

✓ Verified math — the arithmetic on this page is proven against independent reference calculations; the proof is printed near the bottom.

Pre-tax business profit to invest
$
Years invested20
Expected annual return6.0%
Corporate tax on the profit11%

Small-business rates run roughly 9–13% by province on the first $500K; general rates in the mid-20s. The accountant knows the file's true rate.

Personal tax if paid out today45%
Tax on investment returns — inside the corp50%

Passive income in a corporation is taxed at roughly a 50% rate upfront (partly refundable on payout — a nuance the accountant refines).

Tax on investment returns — personally25%

Blended by mix: capital gains tax roughly half the marginal rate; interest at full rate; eligible dividends between.

Dividend tax when the corp pays out at the end35%
On these rates
Invest inside the holdco$0

Small tax now (more invested), heavier tax on returns, dividend tax at the end.

Pay out & invest personally$0

Big tax now (less invested), lighter tax on returns, nothing owed at the end.

Where the answer is "keep it in the company," the next question is often how the holdco finances property — corporate-held title, net-worth programs, the desk's daily work.

Arrange a confidential introduction

Ramin Hallaji, Principal — licensed in British Columbia (BCFSA) and Alberta, Dominion Lending Centres Group · 778-879-6768 · ramin@privatewealthfinancing.ca

Illustration only — deliberately simplified, and not tax or investment advice. Both routes compound the same pre-tax dollar at the same return; every rate is yours to set because the honest answer depends on them. The model taxes corporate investment returns annually at the rate you set and applies dividend tax to the full corporate balance at the end; it ignores refundable-tax mechanics (RDTOH), the capital dividend account, passive-income grind on the small-business limit, salary-vs-dividend mix and income-splitting — precisely the machinery the client's accountant runs. Use this to frame the conversation, not to conclude it. Private Wealth Financing arranges mortgage financing only.