BUSINESS Wednesday, August 5, 1992 — North Shore News - 17 Make right investment decision for you NEVER INVEST only fcr income tax reasons. But always realize the effect tax will have on your investments. In a recent column [ com- mented on today’s relatively low interest rates and discussed some investment alternatives — stocks, revenue property, your own o7 somebody else’s business. I stressed the need to invest time and expertise as well as money, and to feel comfortable with the higher risks (compared with investing in term deposits, Canada Savings Bonds, T-bills, money market funds and similar instruments). Information on the different tax treatment of interest, dividends and capital gains can help you make the right investment deci- - sions for your situation. Note: Use this information to get your planning under way. But you will probably need to do more research and possibly consult with a tax expert before rearranging your finances or taking other steps. -Tax rates vary from province to province and from year to year. But the following figures provide the range for both typically high (taxable income of about 465,000} and low (taxable income below about $29,000) brackets in B.C. and iet you compare. (We have assumed here you have used your capital gains exemption — more on that later.) BUSINESS BRIEFS - INFOMERCIALS A B.C. company that manufac- tures an energy recycling system for electric clothes dryers in North Vancouver will tackle the giant North American marxet with in- formercials, which is the fastest- growing segment of direct market- ing. The Aqua-Veni is marketed by Aqua Vent of Kamloops and is manufactured by Qualidux In- dustries of North Vancouver. !t is endorsed by Power Smart Inc.’s product endorsement program and was tested by Powertech Labs. The system is certified to save up to 15% in energy and cut dry- ing time by up to 12%. Aqua Vent president Reb Walsh said his company wanted to use the most effective means to mar- ket the product throughout North America and that is why the firm has embarked on an infomercial marketing campaign. “We realised the only way to tackle the American market was to meet it head on with the most effective form of advertising there is for products like this. “The infomercial we have just made with American Direct Mar- keting of Sarasota, Florida will begin airing Sept. 12 or 13 on over 100 U.S. TV stations and gives us immediate feedback. “‘Infomercials are amazingly ef- Michael Grenby DOLLARS AND. SENSE ’ The tax rate on interest in the high tax bracket is 48.3%; on div- idends, 32.7%; on capital gains, 36.3%. In the low bracket: on in- terest,26.6%; on dividends, 7.2%; on capital gains, 20%. In other words, your interest is taxed at rates ranging from 26.6% to 48.3%, Dividends are taxed 7.2 to 32.7%. And capital gains are taxed 20 to 36.3%. If you can use your capital gains exemption ($100,000 for most gains, $500,000 for gains on qualifying small business shares fective if you have the right pro- duct with mass appeal at the right price. This one certainly has, par- ticularly as it is so appealing to people concerned about saving money and energy,’’ said Walsh. The Aqua-Vent allows the user to recycle all the filtered hot air from the dryer into the home. During the summer the hot air can be vented outside. Conventional electric dryer in- stallations cause hundreds of cubic feet of cold air to be drawn into homes in the winter. BUSINESS WOMEN NOMINATIONS SUCCESSFUL B.C. women en- trepreneurs are being sought for a national awards competition sup- ported by the Economic Devei- opment, Smal! Business and Trade Ministry. Kathleen Costello, businesswomen’s advocate with the ministry, has been appointed to the B.C. selection committee of the first-ever Canadian Woman Entrepreneur of the Yeas Awards. “Our province has some of the finest examples of entrepreneurial spirit to be found anywhere,”’ said Costello. ‘“‘This is a wonderful opportunity to let Canada’s spotlight shine on our winners and to recognize role models for other women.”’ Nominations are being sought for the awards, co-sponsored by the Bank of Montreal, Science aad Technology Canada, Ernst and Young, The Financial Post and Digital Equipment of Canada. Self nominations are encouraged. The four awards categories are: @ Start Up: for women who have displayed an exira measure of leadership, daring and creativity in successfully starting a business; © Lifetime Achievement: for an active entrepreneur for 20 years or more whose personal success or style has acted as a catalyst and inspiration for both contem- poraries and younger women; @ Quality Plus: for women who have demonstrated an ability to develop and maintain excellence in and farm property), aiming for investments that wiil go up in value will produce the best tax results. “But having a CNIL balance could restrict your use of exemp- tion,’’ Luongo said. CNIL stands for net investment loss.’’ In general, if your interest and rental expenses have exceeded your interest, dividend and rental income since Jan. 1, 1988, you will have a CNIL balance. So when you have a capital gain, you will pay tax on at least part of it. If you have a large capital gain, you may have to pay the alter- native minimum tax (AMT). Dividends get a better tax break than interest because the company declaring the dividends has al- ready paid tax on its profits. When you borrow to_ invest, you should be able to deduct the interest you pay — as long as the investments produce or have the potential to produce income. But this interest cost could create or increase a CNIL balance. Also, if you sell the underlying investment and don’t reinvest the proceeds, you may no longer deduct the in- terest. “If you have significant in- vestments and especially if you are in a high tax bracket and have us- ed up your capital gains exemp- tion, you might be able to defer a considerable amount of tax by “‘cumulative every aspect of the company’s of- fering to customers, employees, community and the environment; @ Impact on Local Economy: for the businesswoman who has best developed or expanded the business and has contributed significantly to the development of the local economy. Costello is also asking for names of high-profile, successful women entrepreneurs to represent B.C. on a panel of national judges. Statistics show B.C. women are starting businesses at a much faster rate than men, said Costello. “While this may be a time of growth for women entrepreneurs, their contributions have strong roots in 8.C.’s history. This award looks to our past and ig- nites the future.’” The deadline for award nominations is Aug. 31. Nomina- tion forms are available by calling Costello at 365-5118. Nomination forms can also be picked up at Bank of Montreal branches and Ernst and Young offices. FREE BOOKLET One often hears Canadians com- plaining about the high amount of tax they pay. What many individu- j als do not realize is that simply by J structuring their investments care- fully. they can pay fur less tax. This guide will provide you with ideas for saving tax through your investment program. Call today to receive your com- plimentury booklet. Mark Osachoff 661-7433 ScotiaMcLeod Trusted neesimentadece sce 192? having your investments in a holding company,’’ said Luongo. If the company pays less tax than you on investment income, then the saved tax may be reinvesied in the company. Even- tually the money will be paid out but by then you might be in a lower tax bracket. You must weigh the benefits against the costs of setting up and running the company. There are also estate planning issues to con- sider.’ Mike Grenby is 2 North Shore-based columnist and in- dependent financial adviser who works with individuals; he will answer your questions as space allews — write to him c/o The North Shore News, 1139 Lonsdale Ave., North Vancouver V7M 2H4, “NATURAL GAS MONTHLY | INCOME FUND 15 Year minimum: 25 Year proven potential, substantial Natural Gas reserves in B.C. @ Minimum Projected Retum: 16.7% after tax § $5,000 per unit — minimum 5 units g Major Bank financing available on approved credit For further inforraation contact: Coastline Gas Income Fund Lid. Phone 685-6600 Fax: 685-6601 NM This advertisement does not constitute an offer to sell nor a solicitation to buy * e f a security which can only be made by offering memorandum. ° Quer er a woe os Crab” Prepared 4 differant ways Choose any 4 dishes on cur LUNCH or DINNER menu and receive a FREE CRAB! Saturdays only on 10 selected items on our 29 item Dim Sum menu “Dim Sum “1 Office Technology Pregrams Career Training for Administrative Support Personnel © Secretarial—9 monthis @ Financial—10 months e Administrative Assistant—10 months Acquire communication, interpersonal and computer skills: word processing, spreadsheets and database. OUR GRADUATES ARE IN DEMAND! The Office Technology Program offers you: Professional instructors eWell-equipped computer labs ¢Work practicums *College Certificate *Job placement assistance Some part-time courses are available. We have a place for you — but hurry! 4 ; m interview. APILANO COLLEGE Telephone 984-4959 to arrange for a personal Financial assistance may be available through Canada Employment Centre. 2055 Purcell Way « North Vancouver B.C. + V7J 3H5