HAVE YOU made plans for what you will do after you
retire? If you think you might try some part-time con-
sulting or other self-employed activity, tax planning now
could prove profitable even before you retire.

Many people find plaviny golf,
gardening and travelling aren’t
enough to occupy themselves fully
after the initial period of retire-
ment. They miss being productive,
being necded — especially if they
realiy enjoyed the work they did
before retirement.

How about you? Might you be
happier, personally as well as fi-
nancially, if you were to continue
to work a little after you retire?
Ideally, you would work when
you felt like it, so you could still
golf, garden and travel when you
wanted to.

Most people earn their highest
incomes, and pay the most income
tax, in their final years before
retirement. Yet they probably
don’t feel comfortable putting
money into tax shelters because of
the risks and long-term invest-
ment horizon involved.

Even if you aren’t planning to
retire for a while, or yeu don’t
plan to work after retirement,
some of the following steps could
still save you tax if you have — or
could have — a self-employed
sideline.

Let’s say you are married, with
a@ spouse who isn’t working out-
side the home or otherwise is in a
lower tax bracket than you.

Michael

DOLLARS AND SENSE

You pay your spouse to do the
research and other work required
to set up your post-retirement
consulting or other self-employed
business.

It might take three to five years
to build up your business to the
point of profit, so when you retire
everything will be in piace.

During these startup years, you
might start out earning, for ex-
ample, $5,000 a year from your
new business.

Harrison hosts sand
sculpture competition

NINE: OF the top teams
‘from the world champi-
onship sand sculpture
contest held on the Har-
rison beach last
September have been in-
vited back for a unique
new kind of event that
involves competition and
cooperation at the same
time.

Each team will have 90
man-hours and a 20-by-20
foot plot of sand on which to
create one of the units that will
link up to form “The Circus
Train.”

The first team to register,
Freddy and the Sandbiasters
from Victoria, has chosen to

create the locomotive. A com-
bined team headed by Jack
Rimmer from New
Westminster and Darcy Gertz
from Coquitlam will do the el-
ephant car.

Totally in Sand, Orbital
Sanders and Pacific Northwest
Sandshapers, all based in the
Seattle area, have booked plots
but haven’t yet revealed what
they will carve. Three more en-
tries from the Lower Mainland
and one from Washington are
expecied.

Carving and judging will be
completed on Saturday, April
18, and the completed train
will be on = exhibition from
Easter Sunday until the May
long weekend. There is a 32
admission charge for adults.

For a GIC
that’s better

682-7171

F Citizens Trust

MEMBER CDIC

Wednesday, April 8, 1992 - North Shore News — 39

USINESS
Retirement can pay off with proper planning

You might pay your spouse
$10,000 a year for the work in-
volved in getting the business
under way. Pay reasonably but
aggressively: it’s productivity that
counts. If your spouse is twice as
productive as somebody else you
would hire, pay your spouse twice
the going rate.

You could also pay other family
members in a lower tax bracket —
perhaps children who could then
pay their own education and other
expenses, or even a parent who
could then support him/herself
more instead of relying on your
(after-tax) help.

If you claim a $5,000 loss,
which you then deduct from your
other (employment and_ invest-
ment) income, you save more than
$2,000 tax a year if you are in the
higher tax brackets.

Your spouse has to declare this
income. Depending on whether
your spouse already has other in-
come, the family could easily
reduce its total tax bill by around
$1,000 a year. If you also pay two
children $2,000 a year each, you
could save close to another $2,000
a year.

Preparing for your post-retire-
ment business could involve trav-
el. You might tag on some holiday
travel to the trip. Deduct a rea-
sonable amount of the expenses —
those relating to the business part
of the trip — for even more tax
Savings.

However — and this is the key
— you must have a ‘‘reasonable
expectation of profit.”
allows you to deduct your losses
because one day it hopes to tax
your profits.

So you must draw up a business
plan to demonstrate this ‘‘reason-
able expectation of profit.’? The

Ottawa ~

plan should show what you hope
to accomplish, why you feel you
will make moncy, your marketing
plans, and so on.

Ask Revenue Canada for its
Business and Professional Income
Tax Guide which lists many of the
deductions you may claim. Ask
the Royal Bank for its two free
Your Business Matters guides —
one to heip you start and run a
self-employed business (it includes
a sample business plan) and one
to provide sources of further in-
formation.

Buy or borrow Home Inc., by
Douglas and Diana Gray
(McGraw-Hill), which provides
information on running a small
business Gut of your home. (Note
that you may not use home office
expenses to create or increase a
loss, although in this case the ex-

penses may be carried forward for
possible use the following year.)

Keep all receipts and careful re-
cords. Have a smal! log book in
your car. Have business cards and
letterhead printed. Open a se¢pa-
rate account for your busiiess.

You can operaie as a sole pro-
prictorship — in fact, that’s the
best way to operate if you expect
startup losses. Later, it might
make sense to incorporate,
depending on your income and tax
situation.

Mike Grenby is a North
Shore-based columnist and_in-
dependent financial adviser who
works with individuals; he will
answer yout questions as space
allows — write to him c/o The
North Shore News, 1139 Lonsdale
Ave., North Vancouver V7M
2H4,

William Meek Printing
LOWER LONSDALE POSTAL OUTLET

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this coupon)

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988-7770

Maintaining the benefits
of short term —_
electricity trade

Beginning April 6, B.C. Hydro and POWEREX will be appearing before the
B.C. Utilities Commission to renew our authorizations to trade surplus
electricity with Alberta and the United States.
B.C.Hydro plans and operates its electric system to serve the needs of this
province. But variations in supply and domestic demand can make electric-
ity available that is surplus to our needs.
Short term electricity trade has been an efficient and profitable way ic
manage this surplus electricity for more than 75 years.

The benefits to British Columbians are significant. They include ove. -ne
billion dollars in revenues during the last seven years; coordination ay:ce-
ments with other utilities that increase the efficiency of our system operation
as well as the reliability and security of our own domestic power supply; and
potential environmental benefits for both us and our neighbours.

The current Energy Removal Certificates required for short term electricity
trade expire on September 30, 1992. B.C.Hydro and POWEREX are
requesting that they be renewed until September 30, 1997. Renewal is
required in order that the benefits of electricity trade will continue to be
enjoyed by all British Columbians,
The public hearing on the application begins at 9:00 a.m. on April 6, 1992,
in the B.C.U.C. Hearing Room, Sixth Floor, 906 Howe Street, Vancouver.
The hearing may continue throughout the month, and will include sessions
in Coquitlam (April 13) and Chilliwack (April 14).

BG hydra