Mark Feigenbaum and Feigenbaum Consulting recently joined KPMG in Canada
With the massive wealth and the complex businesses switching hands as the baby-boomer generation retires, inter-generational business transfers are currently Canada's most significant tax-law issue, says Mark Feigenbaum, a tax lawyer and accountant.
On Jan. 1, 2024, new federal tax rules on intergenerational business transfers will take effect. The law change, introduced in the 2023 federal budget, establishes two options for transferring business shares to a family member. One option is within 36 months; the other is within a decade. There are new conditions to prove the transaction is a genuine family business transfer.
“There’s a lot a lot of planning to do on the tax and non-tax governance side of who's going to manage this business and which of the children are going to be interested in running the business,” says Feigenbaum. Depending on how clients wish to proceed with the transfer, the process raises many questions. Families must determine things like how to split the business among the family members, the most tax-efficient way for the parents to retire and draw money out of it, or how to find the right buyer to sell it to and the optimal structure to execute the sale, he says.
On Aug. 4, the Department of Finance released a package of draft tax-law changes. For Feigenbaum’s clients, the most significant is the proposed changes to the alternative minimum tax regime. The feds proposed to increase the federal alternative minimum tax rate from 15 to 20.5 percent and the exemption amount from $40,000 to around $173,000.
“There isn't as much emphasis on how it's going to affect people as maybe has been flushed out in the media,” says Feigenbaum. “For these particular intergenerational transfers, the AMT will have an effect, and I think that has to be quantified in what the exposure is to that change.”
Feigenbaum founded Feigenbaum Consulting in 2003. He is a lawyer and a fellow of the Chartered Professional Accountants in Ontario. Feigenbaum Consulting is a full-service accounting and law firm based in Toronto. It serves clients with tax planning, compliance and controversy advice, cross-border estate planning, wills, trusts, and litigation. Feigenbaum specializes in high-net-worth clients with complex tax issues.
KPMG recently announced that Feigenbaum and the Feigenbaum Consulting team joined the firm’s family office, which does legal, tax, and accounting work for high-net-worth clients. Feigenbaum joins as a partner, and KPMG said he will strengthen their cross-border legal and tax planning services.
"Having spent my early career with KPMG's cross-border tax practice, I am delighted to rejoin the KPMG family," says Feigenbaum. "There is a strong appetite for integrated services that help mobile individuals and families navigate their complex tax, legal, wealth and estate planning needs."
Feigenbaum Consulting also focuses on the sports and entertainment industries. Feigenbaum began his career as an internal auditor at Paramount Pictures in Hollywood, and in earning his Doctor of Juridical Science in international taxation, he wrote his dissertation on Canada-US cross-border taxation of the sports and entertainment industry.
Feigenbaum represents clients in theatre, television, movies, music, and most sports at all levels.
“It is really a niche industry,” he says. “The rules are different for a lot of these types of taxpayers. The industry process, the culture, and the lingo – all that is very different.”
