| Full ra ufications of GST still to be felt THE GOODS and Services Tax has been with us for almost a year. But we haven't yet felt all the results — good or bad. For example: @ BAD. If your employer pro- vides you with taxable benefits, be prepared for a higher income tax bill — and be prepared to send a cheque to Revenue Canada when you file your tax return next spr- ing if insufficient tax has been withheld at source. @ GOOD. If you pay your travel- ling expenses while working away ‘frem your employer’s normal place of business or if you are a commission salesperson paying your Gwn expenses, you can get 2 * tax rebate — provided you apnly for it. .’ “Because GST is being charged “on certain taxable employee benefits, -you can expect to see a higher empioyment earnings total shown on your T4,"’ said Elio Luongo, senior tax manager with Peat Marwick Therne, chartered accountanis. “‘That means you will pay more tax. So make sure your employer has been withholding enough in- come tax to cover the additional tax liability —~ or be prepared to pay this extra tax when you file your tax return.’? '. Wages, salaries and commis- sions paid to employees escape the GST, as dc private health plan . premiums, daycare services, inter- est-free and ‘low-interest loans, gtoup. term life insurance and jJong-term residentiai rents — all taxable benefits but not subject to the GST. However, said Luongo, typical taxable benefits that do attract the GST. include personal use of an employee’s eutomobdile, board and lodging, prizes, awards, holiday trips and frequent flyer programs. “As 2 general rule,’’ he said, “the GST status of the benefit is the same as the goods and services generating the benefit. If the goods and services are taxabte to the employer, the benefit passed Michael Grenby a = DOLLARS AND SENSE on to you will have to include a GST component. Of course, if the goods and services aren’t subject to GST, then no GST component is added to your taxable benefit.” One of the most common — and financially significant — employee benefits is personal use of the employer’s vehicle. “This benefit consists of the standby charge and operating charge, based on the value and uperating costs respectively,’’ said Luongo. Yeu, the employee, then have the GST charged on both these items included as your tax- able employment income. “With the yalue and cperating costs of vehicles increasing, the GST component of this: benefit can be quite significant.”” If your employer pays for holi- day trips for you — and especially for your partner —- o7 you use an employer’s vacation property without cost, these benefits plus the GST should be included in in- come, again increasing the income tax bill. As for getting back GST you have paid as an employee or comunissicn salesperson, ‘‘any ex- penses you have been able io claim in the past on your personal tax return will be eligible for the GST rebate,’’ Luongo said. “Your rebate claim is based on For more information about the federal government’s proposals for constitutional reform, call toll-free: -800-56/-1 Deaf or hearing impaired call: 1-800-567-1992 «rry-rop) ‘ier Canada Shaping Canada’s Future Together your total expenses iess any reim- bursement you received from your employer.’* (Your employer must be registered for the GST and cannot be a ‘‘listed financial in- stitution”? like a bank, insurance company or investment dealer. However, if you work for other employers who provide GST- exempt goods or services you may claim the rebate.) You may also make a claim for the GST relating to capital cost al- jowance (depreciation) claimed on any capital assets you use for business purposes, like your vehi- cle. “Although you have four years to submit your GST rebate claim, you should probably aim to file at the same tire you complete your personal tax return, to get back your money as soon as possible.” -said Luongo. You have to complete alt your yeceipts to make your claim, which you normally do when you file your own return. Note that when you deduct ex- penses on your return, you will also deduct the GST you paid. So when you receive your GST rebate, you will have to add that amount to your income in the year you get back the money. “The new GST rebate claim mass your return that much more complicated,’’ Luongo said. ‘But the benefit of claiming the GST rebate wiil generally outweigh the additional costs and time associated with a more dif- ficult return,’” After all, getting back 100% of the GST you paid is always more advantageous than merely deduc- ting it, which saves you only about 26 to 50% of the amount you paid. Mike Grenby is a North Shore-based columnist and in- dependent financial adviser who works with . individuals; he will answer your questions as space allows — write to him c/o The North Shore News, 1139 Lonsdale Ave., North Vancouver V7M 2H4, Wednesday, November 6, 1991 — North Shore News ~ 49 The greatest impediment to passing property from one generation to the next is tax. 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