Summary: For a well-planned sale, closing day is the finish line of two or three years of structuring, not the starting gun. The first 90 days are for confirming the deal closed as modelled, acting on time-sensitive tax items such as the capital dividend and AMT, and starting the estate, giving and family work that only becomes possible once the money is real.
The short answer
If you planned your sale well, the first 90 days are not about working out where you stand. That work happened in the two or three years before closing, when the company was positioned for the qualifying share tests, the capital gains exemption was multiplied across the family, and the after-tax number was modelled before the letter of intent was signed.
What the 90 days are really for is executing that plan, confirming the deal closed the way the model assumed, and acting on a handful of tax decisions that are far more time-sensitive than most founders expect. The longer-horizon work, the estate, the giving and the family conversation, can only begin once the liquidity is real, and it belongs in this window too.
The founders who struggle after a sale are rarely the ones who missed a step in the first month. They are the ones who treated closing day as the starting line.
Closing day is the finish line, not the starting gun
Most of the decisions that determine how much of the sale price a family keeps cannot be made after closing. The qualified small business corporation tests look back 24 months, so a company carrying excess cash or investments has to be cleaned up long before a buyer appears. The lifetime capital gains exemption, $1,275,000 per individual in 2026 after indexing, can only be multiplied across a spouse and children if a freeze and family trust were in place well ahead of the sale. Safe income dividends that reduce the gain have to be paid before the shares change hands.
The deal terms themselves carry tax consequences that are locked in at signing. Whether the buyer purchased shares or assets, whether you sold personally or through a holding company, and how much of the price sits in holdbacks, an earnout or a vendor take-back note all decide where the money lands and when it is taxed. Corporately owned life insurance and any individual pension plan sponsored by the operating company needed to be moved out before the buyer took control.
By closing day, a well-advised founder has answered the structural questions. What remains falls into three kinds of work: verifying that the deal closed the way the plan assumed, acting on a short list of time-sensitive tax items, and starting the longer-horizon planning that only becomes possible once the liquidity is real.
| Question | Settled before closing | What remains in the first 90 days |
|---|---|---|
| How much of the gain is exempt | Purification, freeze, family trust, LCGE claims for each shareholder | Confirm each claim and model AMT |
| Where the proceeds land | Personal sale or holding company sale | Invest and draw from the entity that received them |
| How much tax the sale creates | After-tax model built before the letter of intent | Reconcile the model against the closing statement |
| When the rest of the price arrives | Holdbacks, earnout, vendor take-back terms | Track release dates and claim reserves |
| What happens to insurance and pensions | Policies and IPP moved out of the operating company | Rebuild coverage for a liquid estate |
The capital gains inclusion rate remains at one half, since the proposed increase to two thirds was cancelled in March 2025 and never took effect.
What should I do in the first 30 days after selling my business?
The first month is for reconciliation and for the few actions that lose value if they wait. None of it involves investing the long-term capital yet.
Reconcile the proceeds against the model. Working capital adjustments, escrow, holdbacks and closing costs mean the cash that arrives rarely matches the headline price. Every difference flows through to the tax calculation, so the after-tax model built before closing should be updated with the actual closing statement before anything else moves.
Hold the cash in the right entity, in the right instruments. At the scale of most founder exits, deposit insurance is not the relevant safeguard. CDIC coverage is $100,000 per deposit category at each member institution, which barely registers against an eight-figure balance. Treasury bills, short-term Government of Canada bonds and GICs laddered across several issuers are the more natural home while the plan is finalized, held in whichever entity received the proceeds. The tax reserve should be set aside separately so it is never mistaken for investable capital.
Pay the capital dividend if your holding company sold the shares. The non-taxable half of the gain is added to the holding company's capital dividend account, and that balance can be paid out to shareholders tax-free once the election is filed. It is worth acting promptly, because capital losses the holding company realizes later in the year reduce the balance and can quietly erode tax-free room the sale created.
Model the alternative minimum tax. Since 2024, 30% of a gain sheltered by the lifetime exemption is included in the AMT base, along with 100% of other capital gains, at a federal rate of 20.5%. A founder whose only significant income is the exempt gain can owe AMT even when regular tax is minimal. It is recoverable against regular tax over the following seven years, but it is a cash cost now and belongs in the tax reserve.
Diarize the payment dates. Personal tax on the gain is generally due April 30 of the following year, and CRA instalment reminders calculated on the unusual sale year may follow, which can be managed by paying on the current-year method instead. A holding company that sold shares generally owes its balance two months after its year-end and may be required to pay monthly instalments. Holdback release dates, earnout measurement periods and vendor take-back payments belong on the same calendar, along with the annual capital gains reserve claim that spreads tax on deferred proceeds over as many as five years.
Note what you still owe the buyer. Transition roles, non-competition covenants and earnout targets shape both your calendar and how part of the price is taxed, since payments for restrictive covenants and earnouts have their own reporting rules.
What should I do in days 31 to 60?
The second month is when the capital goes to work and the income plan is set, which means turning the pre-sale model into an investment policy statement and a draw strategy that both fit the entity holding the money.
Finalize the investment policy statement. The IPS should separate the capital by purpose: a liquidity reserve covering the tax bill and two to three years of spending, a core pool built for the long term, and any capital earmarked for a next venture or for family. On the question of investing at once or in stages, Vanguard's research across the US, UK and Australia found that investing a lump sum outperformed spreading it out about two thirds of the time. Staging still has a place when it is what lets a founder stay invested through the first drawdown, so the decision is as much behavioural as statistical, and it should be written into the IPS rather than made one market headline at a time.
Locate assets by tax treatment. Investment income earned in a Canadian-controlled private corporation in BC is taxed at roughly 50.67%, of which 30.67 percentage points is refundable when taxable dividends are paid. Interest is the least efficient income to earn inside a holding company, while capital gains are among the most efficient, because the non-taxable half adds to the capital dividend account. Registered accounts, the holding company and personal taxable accounts each have a different role, and the asset mix across them matters as much as the mix within them.
Set the order in which money comes out. For a holding company owner, the sequence is usually tax-free capital dividends first, then eligible dividends supported by the general rate income pool, then non-eligible dividends, timed so that each dividend recovers the refundable tax sitting in the corporation. Without an operating business, salary is generally no longer available, so dividends become the main lever and the timing across tax years matters.
Check the split-income rules before paying family. Dividends to a spouse or adult children from the holding company can fall under the tax on split income unless an exclusion applies, such as shares held by a family member aged 25 or older carrying at least 10% of the votes and value, or the spouse exception once the owner turns 65. Income splitting that worked inside the operating business does not automatically carry over.
Rebuild insurance for a liquid estate. Group health, dental, disability and life coverage generally ended at closing and may need individual replacement. The larger question is the estate itself. With a holding company full of liquid assets, a deemed disposition at death can create a substantial tax bill, and permanent insurance owned by the holding company can fund it while adding most of the death benefit to the capital dividend account. Key person and buy-sell policies tied to the old business should be reviewed, since their original purpose has ended.
Address concentration if you took buyer shares. Where part of the price was paid in the buyer's stock, the lockup schedule, the size of that position relative to the rest of the portfolio, and any hedging or staged disposition plan belong in the IPS from the start.
What should I do in days 61 to 90?
The third month turns to the work that could not responsibly be done until the money was in hand: the estate, the giving strategy and the family's relationship with the wealth.
Update the estate documents for a different estate. A will written around an operating business rarely suits an estate made up of a holding company and a portfolio. Wills, powers of attorney, BC representation agreements and beneficiary designations should be reviewed together, along with whether the executors you chose are equipped to manage a large liquid estate. In BC, probate fees run at about 1.4% on the value of an estate above $50,000, which makes probate planning more relevant than it was when most of the value sat in private company shares.
Plan for the double tax at death. A holding company owner faces a deemed disposition of the shares at death, and the same value can be taxed again when the corporation later distributes it to the estate. Post-mortem planning, through a pipeline or a loss carryback within the estate's first taxation year, can relieve much of that, but both depend on the will giving the executors the right powers and on the estate qualifying as a graduated rate estate. The time to build that into the documents is now.
Consider a second freeze or a new trust. Once the holding company's value is largely liquid, a second estate freeze can cap the tax at death and pass future growth to the next generation, often through a new family trust with its own 21-year horizon. For founders aged 65 or older, an alter ego or joint partner trust can hold personally owned assets outside the estate and provide continuity on incapacity.
Decide on giving while the gain year is open. The year of the sale is usually the year a large gift is worth the most, since donation credits can be claimed against up to 75% of net income and carried forward five years. Donating listed securities in kind eliminates the gain for regular tax purposes, and when a holding company makes the gift, the full gain is added to its capital dividend account. The AMT rules now include 30% of gains on donated listed securities and allow only 80% of the donation credit against AMT, so a large gift in the same year as an exempt sale needs to be modelled carefully. Whether to give directly, through a donor-advised fund or through a private foundation is a decision worth taking before December 31 of the sale year.
Begin the family conversation. How much the next generation knows, when and how they are brought into decisions, and what the money is meant to make possible are questions that shape every plan that follows. They are also the questions founders most often postpone, and they rarely get easier with time.
What should I avoid in the first 90 days after a sale?
The mistakes that matter most in this window are permanent ones made before the plan is finished. A large property purchase, a loan to family, or an investment brought by someone who heard about the sale may all prove sensible, but each is easier to judge once the tax is settled and the IPS exists. A good opportunity is usually still available in three months.
Two structural mistakes deserve particular mention. Starting a new venture inside the same corporate group without planning for it can cost the new business its small business deduction, since passive income above $50,000 in an associated holding company grinds the deduction down. Unwinding a holding company in a hurry, or paying large taxable dividends in the same year as the gain, can undo deferral that took years to build.
The risk in the first 90 days is rarely doing too little. It is doing something irreversible too early.
What can change the 90-day timeline?
Four situations reorder the phases, and in each one the tax and legal decisions move ahead of the investment decisions.
The sale closed late in the year. A closing in November leaves weeks rather than months to settle the year's giving, harvest losses against the taxable part of the gain and plan dividends from the holding company. A closing in January leaves a full year to do the same work deliberately.
Part of the price is deferred or paid in shares. With an earnout, vendor take-back note or buyer stock, the proceeds arrive over years rather than at once. Deployment is staged by necessity, the reserve is claimed annually, and the IPS has to account for capital that is promised but not yet received.
A family trust owned shares. Gains that the trust allocates to beneficiaries, and designates so that each can claim the lifetime exemption, must be paid or made payable within the trust's taxation year, which ends December 31. The trust's own AMT exposure, its annual reporting under the expanded T3 rules and its 21-year deemed disposition date all need to be on the calendar.
There is a US connection or a planned move. A US citizen who sells Canadian company shares is taxed on the gain by the IRS, which does not recognize the lifetime exemption, so a gain sheltered in Canada can still be taxed in the US. A holding company owned by a US person can be a controlled foreign corporation with its own US income inclusions, and most Canadian mutual funds and ETFs are treated as PFICs. A founder planning to leave Canada faces departure tax on accrued gains. In any of these cases, cross-border advice comes before anything else moves.
What if I did not plan before closing?
Some doors close at signing. Purification, multiplying the exemption through a family trust and pre-sale safe income dividends cannot be done after the fact, and if the shares were sold personally, the proceeds are personal. It is better to accept that clearly than to chase structures that no longer fit.
A great deal remains open, though. The capital dividend, the reserve on deferred proceeds, the AMT modelling, the year-end giving decision, the draw strategy and the estate work all still apply, and they are worth more when they are coordinated than when they are handled one at a time. For a founder in this position, the first 30 days look closer to a discovery exercise: gather the closing documents, get an accurate tax estimate, and bring the accountant, lawyer and portfolio manager into the same conversation before any long-term capital is committed.
Where Westmount starts
Westmount Wealth Management is a Canadian portfolio manager with offices in Vancouver, Qualicum Beach and Toronto. It is registered in BC, Alberta, and Ontario and provides discretionary portfolio management to founders during and after a business sale, as well as to incorporated and asset-rich retirees.
The most valuable work we do with founders usually begins two or three years before closing, alongside their accountant and lawyer, when the structure of the sale and the plan for the proceeds can still be shaped together. The 90 days after closing are where that plan is carried out, and our role is to make sure the investment, tax and estate pieces move in the right order. If you are approaching a sale, or have recently closed one, the first conversation is a discovery meeting to understand what has already been decided and what still needs deciding.
Frequently asked questions
When should I start talking to a portfolio manager about selling my business?
Ideally two to three years before a sale. The qualified small business corporation tests look back 24 months, and a freeze or family trust needs time to be in place before it can multiply the lifetime exemption. A conversation that starts at the letter of intent can still shape the deal terms, but much of the structural planning will already be out of reach.
How much of my gain can be tax-free in 2026?
The lifetime capital gains exemption for qualified small business corporation shares is $1,275,000 per individual in 2026, now indexed to inflation each year. Where a freeze and family trust were in place, each eligible family member can potentially claim their own exemption. Gains above the exemption are taxed at the one-half inclusion rate.
Will I pay alternative minimum tax on the sale?
Possibly. Since 2024, 30% of a gain sheltered by the exemption is included in the AMT calculation, and founders with little other income in the year of the sale are the most exposed. Any AMT paid can be recovered against regular tax over the following seven years, so it is a timing cost rather than a permanent one for most families, but it should be modelled before the return is filed.
Should the proceeds stay in my holding company?
That was largely decided by how the sale was structured. If the holding company sold the shares, keeping the capital there defers personal tax until it is drawn, and the right draw strategy uses the capital dividend account and refundable taxes to keep the overall cost close to what you would pay personally. The question that remains is how much to draw, when, and from which pool.
Is it normal to feel unsettled after selling my business?
Yes. Surveys by the Exit Planning Institute have found that roughly three in four owners report profound regret within a year of selling, usually tied to the loss of identity, structure and purpose rather than the price. Planning the next chapter of working life is part of the financial plan, because what you want to do with your time shapes what you need the money to do.
Should I tell people how much I sold my business for?
That is a personal choice, but many founders find it helps to be discreet at least until the plan is in place. Once a figure is known, requests and pitches tend to follow, and declining is easier when you can point to a plan that already exists.
Do I need a new accountant or lawyer after selling my business?
Not necessarily. The advisors who handled the sale know the deal in detail, which is valuable. The question is whether their expertise extends to what comes next, holding company strategy, estate planning and cross-border issues among them, and whether they will work in step with whoever manages the investments.
References
Advisor.ca, Essential tax numbers: Updated for 2026 (2026 lifetime capital gains exemption of $1,275,000).
Insight Accounting CPA, Capital Gains Tax Changes in Canada 2026 (cancellation of the proposed inclusion rate increase).
PwC Canada, Changes to the alternative minimum tax enacted in 2024 (30% inclusion of exempt gains, 80% donation credit).
BMO Private Wealth, Alternative minimum tax (100% AMT inclusion of capital gains, 30% inclusion on donated listed securities).
Ratehub, CDIC insurance coverage explained ($100,000 per category, per member institution).
Vanguard Research, Dollar-cost averaging just means taking risk later (2012), summarized by BenefitsPRO.
Exit Planning Institute, The Exit Planning Blog (75% of owners reporting profound regret within one year).
This information has been prepared by Westmount Wealth Management Inc. Westmount Wealth Management Inc. is registered as a Portfolio Manager in British Columbia, Alberta, and Ontario. Westmount Wealth Planning Inc. is a subsidiary of Westmount Wealth Management Inc.
This material is distributed for informational purposes only and is not intended to provide personalized legal, accounting, tax, or specific investment advice. Please speak to a Westmount Wealth Advisor regarding your unique situation.
