58 - Wednesd le offers te DOLLARS AND SENSE GO FOR an RRSP, con- ‘sider incorporation if you have enough: self-employed income,. and possibly. look at a major move — out of Canada. Those are the key tax-saving strategies Mike Mallin applies to -his own personal financial plan- ning. Mallin ts the co-author of Preparing Your Income Tax Returns (CCH Canadian, $24.95), the. most comprehensive (around 700° pages), best-selling (about 60,000 conies a year) guide to both tax’. preparation and tax planning. ~The 1993 edition has just been published. | I like to ask the experts how they manage their money; we can all learn from their ideas. : “I - still look on registere retirement savings plans as the most useful vehicle for tax sav- ings,”’ said the 5C-year-old lawyer who specializes in income tax. “| have rearranged most of my RRSP holdings into a self- directed plan which allows me to invest up. to 18% of my holdings this year (20% in 1994) in foreign investments. That. way, | diversify W. Van man AFTER HAVING the same bicy- cle stolen twice in the last few weeks, luck finally came . West Vancouver resident Jason Mac- ‘Millan’s way when he won a $25,000 Wild Card prize from the B.C. Lottery Corp. MacMillan was at a bus-stop at 14th Street and Marine Drive in West, Vancouver when he realized he needed change for bus fare. The 20-year-old man then ran to a'7-Eleven store across ‘the: street, purchased three Instant lot- s and headed back. to ai : aie” ; 1 =, JASON MACMILLAN...$25,000 winner, . the bus-stop with his fare in hand. . _ Before the bus arrived, he scratched two of his three tickets. He found four aces on the play area of the second tickel and won top prize on the $1 game. “1 teok the bus home and told everyone that I know,’’ - said ‘MacMillan. in case other countries do better than Canada. “T buy mutual funds since 1 don’t have enough money to make meaningful individual investments. And 1 don’t follow the markets closely enough, so, on balance, the inanagers of a fund with a good track record and = stable management should do better than I could.” Mallin has incorporated part of his seli-employed business’ activi- ties. “My six-year-old daughter used her family allowance money - to buy the common shares in that business,” he said. ‘‘So that in- - come is taxed at only about 22% instead of my higher personal rate. : “This is my personal version of a registered education savings plan for her, without any of | the restrictions on how the mone must be used.’* : Otherwise, said Mallin, ‘there isa’t much more he can do to im- prove his financial situation — siiort of moving to another coun-. try with a lower tax rate. “TL could work much harder and under greater pressure to earn More money and spend less time at home,” he said. ‘But having to pay 50% in tax makes the extra effort hardly worthwhile. “If 1 moved to a tropical tax haven, I could still use phone, fax and computer to do _ perhaps two-thirds of the work I do now. Even isough my income would drop, the tax savings would prob- ably leave me dollars ahead.”’ Mallin said in the years ahead, ‘‘modern technology may open similar opportuniiies to ever larger segments of the middle class.’” Places like Bermuda, Costa Rica and some of the Caribbean islands ‘offer special financial at- tractions — usually including a very low flat tax rate -— to attract both entrepreneurs and retizees. The temptation to move to a warmer. meteorological and finan- cial climate would mean.a loss to wins $25,000 _. He said he will use his windfall to treat himself to a top-of-the- line mountain bike. Three North Vancouver residents also won lottery prizes recently. Karim Bhatia won 310,000 with BC Keno; Gordon Clark won’$10,000 with Zodiac and Bruce Vannerus won $10,000 with Gold Rush. DEBENTURES | in high tech software company established in 1987 14% interest paid quarterly | , (RRSP eligible) . Minirnum $25,000) to Sophisticated Investors as defined in the BC. Securities Act Convertible into Equity for two years Olfaring Memorandum available on request For further information call: ©. Lome Brown DCS International 669-0047 ‘This advertisement is neither an offer to sell nor a Solicitation of an offer to buy these securities, Any offering will be made only by Offering Mernorandum. e AX-Saving strategies Canada of both capital and en- trepreneurship. “As a Canadian, you'd have the difficult choice of balancing personal advantage and public welfare; you’d have to put ¢ dollar value on how much you love your country," said Matlin. In the meantime, you still face the challenge of keeping your in- conie fax to a minimum while you are a Canadian resident. One change announced late last year affects many people whose spouses died during $992. Under the old rule, a spousal RRSP contribution could be made on behalf of the deceased up to 60 days after death. This deadline often passed before the surviving spouse or other executor could make the contribution. Under the new rule, the deadline has been extended to 60 days after the end of the calendar year of death — effective with the 1992 tax year. So if your spouse died last year, you have until March | to make a spousal RRSP contribution and so reduce taxes for 1992, Because most common-law couples now are treated the same as married couples for tax pur- poses, ‘you also have until March _1 to make a spousal RRSP con- tribution for 1992,"* said Mallin. “‘That contribution can be bas- ed not only on earned income in 1991 but also, ‘for the special $6,000 spousal rollover, on regular pension or deferred profit-sharing Some things never change. plan income received in 1992," Finance Minister Don Mazankowski also announced latz last year the Home. Buyer’s Plan has been extended another year. But, warned Mallin, if you decide to borrow up to $20,000 from your RRSP under ihe plan to buy a home in which you will live, you could run into double taxation if you also contribute to an RRSP — get expert advice here. 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, : Just like we did Jast year and the three years before, we're offering an RRSP rate higher than the 5 major financial institutions in Canada.* Find a higher posted rate, and we'll beat it. l’s that simple. Consistently higher rates, consistently better service. Bank of British Columbia Division of Hongkong Bank of Canada. Now, what can we do for you? 1457 Lonsdale Ave., N. Vancouver 960-2451 1578 Marine Drive, W. Vancouver 922-3311 *Rates higher than those posted by Rayal Bank, CIBC. Bank of Moutreal, Seatiabank, and‘T.D, Bank on fixed-term red anabte RRSPs.