What is a tax rollover?

The first purpose of a tax rollover is the transfer of property to a business corporation without tax consequences or allowing, to say the least, to postpone those. These mechanisms are provided respectively in the Taxation Act (for the jurisdiction of Quebec) and the Income Tax Act (for the federal jurisdiction). The transferred property will have to be the subject of an evaluation of their value and the consideration received from the business corporation will have to include at least one share of its share capital. An exchange of shares between a shareholder and the issuing business corporation can also be the subject of a tax rollover. Some rollovers require the filing of tax forms with the tax authorities.