Planit:Holding Company

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In this Video you will Learn...
How do I add a holding company to my clients assets properly?
• Add Holding Company account
• Detailed account data entry

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Investment Management Modular Planning
Life Planning Integrated Planning
Why You Should Use Planit Assets and Liabilities Screen

Other Related Topics
Add an Asset Add an Account Introduction to the Assets and Liabilities Screen
Default Revenues Disposition Strategy Investment Income Distribution

The material in this video may differ somewhat from what you see on your site due to difference in version, jurisdiction, corporate content or access level. Regardless of these differences most of the core functions are consistent across all sites, so you'll be able to benefit by and large from what you learn in this video.

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Holding Companies

Holdco's - This feature allows advisors to input information about a client’s Holding Company relative to the current market value, the RDTOH and Capital Dividend accounts, and allows you to do projections on the future income streams available to fund the client’s future goals.

Holding Company: "Planit Learning Circle" Session

Below you will find a Planit Learning Circle Recording on how you can set these Holding Companies up and it will also show you how you can create an Investment Policy Statement (IPS) for Holding Company assets.

PlanitLearningCircl.jpg |Length: 45 Minutes

To view more sessions like this one please click here.

Assets & Liabilities Screen - Holding Company An estate freezing strategy is a great form of tax planning. When a client establishes a holding company, they subscribe their common shares into the holding company in exchanged for fixed-value preferred shares and receive dividends.

Holding Company: We have developed a well-organized feature on the Assets & Liabilities screen that will allow you to enter a holding company.

When adding/creating a new account, if you select Business Other with the account types, then change the Regulatory Types to Holding Company.

A Holding Company is subject to the same taxation rules as a corporation. For example, when a corporation receives dividends from a Canadian source, the corporation is subject to Part IV tax. As a result, the corporation can either retain the dividends it received or pay it out.

For example, when a corporation in Ontario decides not to distribute the dividends it received, the dividends is subject to 38.33% tax. The amount taxed will be placed in a Refundable Dividends Tax on Hand account. This is to ensure that the taxpayer does not park their investment in the retained earnings.

Later on, when the corporation decides to distribute taxable dividends to its shareholders, the corporation will receive a tax refund from the RDTOH at 38.33% of the taxable withdrawal up to the available balance of the RDTOH account.

To illustrate this, I have entered this information below



When withdrawals have been entered, dividend distributions utilize any available CDA notional balance first to pay out a capital dividend, then pay out non-eligible dividends as needed to satisfy the requested withdrawal.

In the final year of the holding company for an “unstructured windup” i.e. no withdrawals have been entered and there are assets in the corporation, all proceeds are distributed as a non-eligible dividend, and CDA notional balance is not utilized.

***In some cases, the holding company may not recover RDTOH related to the final capital gain. ***

Capital Dividend Account (CDA) is a special corporate tax account which provides designated shareholders tax-free capital dividends. This account is funded by paid in capital and it is not part of the retained earnings.

Note: If you did not select the ‘Update/Create Holdco’ checkbox then the revenue streams will not be created on the Pensions & Other Revenues screen.

This efficient feature allows you to enter the details of the Holding Company, Return Distribution, Withdrawal Rate, and Retained Earnings.


  • ‘Withdrawal Year’ is defaulted to the first person’s retirement year.
  • The 3.00% default of ‘Indexation’ is from the Planning Assumptions screen.
  • Retained Earning defaults the ‘From Year’ to the current year and ends the year before retirement.

The Return Distribution allows state how the investments are allocated within the Holding Company.


Below are the various tax rates for Canada that related to holding company taxation (as per 2009).

Holding Company Tax Rates.jpg