TAX ADVISERS always relax a little after a ‘‘no news’’
federal budget like the latest one. It’s a relief to find vir-
tually no tax-rule changes: existing strategies can continue

at least until the next budget.

‘But just make sure you do in-
deed take advantage of the
various personal tax-planning op-
portunities which might be here
today but could well be gone
tomorrow,’' said Donna
Zinkewich of Price Waterhouse,
chartered accountants.

Before we leok at some of those
opportunities, let’s revicw what
steps you could take to deal with
the one personal tax change the
budget did propose.

Starting Sept. 15, 1994, you will
have to pay quarterly tax instal-
ments if you expect a tax bill
(federal plus provincial tax) of
more than $2,000 on your current
year’s income (in addition to tax
withheld at source) and also had
to send Revenue Canada more
than $2,000 tax in either of the
two previous years (again, in ad-
dition to the (tax already
withheld).

This could happen if you have
investment or self-employment
income or receive alimony, for
example.

The simplest way to avoid
quarterly instalments is to have
more tax withheld at source so
your extra tax bill April 30 will
not exceed $2,000. If you are
more aggressive, you might be
able to pay less tax in advance by
doing the calculation each
December and making a single
payment to your tax account by
year-end.

Turning back to what the
budget didn’t change. Price
Waterhouse’s Zinkewich cited the
following key areas:
®@ Capital gains exemption.

RISK: Once again this exemp-
tion has survived but at any time,
Ottawa could further restrict or
eliminate this tax break — as it
did with investment real estate in
the 1992 budget.

WHAT TO DO: Sell capita!
property, whether real estate you
owned before March 1, 1992, or
stocks. ‘‘But only do this if it
makes sense from an investment

Storyteller
entertains
preschoolers

TEDDY BEAR Swim is a pro-
gram at Lonsdale recCentre pool
that combines aquatic fun with
imaginative storytime for parents
and their preschoolers, three years
and older.

Every Saturday evening, 5:30 to
6 p.m., parents drop off their
children with storyteller Pat Cook.

Parents enjoy a leisurely swim
or relax in the hot tub or sauna
while the preschoolers listen to
stories, traditional folk and fairy
tales, rhymes, games and
fingerplays.

Cook is a former librarian and
has been involved with storytelling
for many years, ‘‘She has a wealth
of experience working with
children across Canada as well as
England,’’ said pool supervisor
‘Teresa Laser,

The children join their parents
in the pool for a family swim, 6
to 7 p.m.

“Storytime is optional,’’ said
Cook, “but the children don’t
want to miss it.””

For more information, call
987-PLAY or check your. Spring
Leisure Guide. ,

DOLLARS AND SENSE

as well as a tax point of view,”
said Zinkewich. Or you could
“crystallize’’?’ your capital gain
(transferring to a family member
or company ~- get expert advice .
first), again to claim the exemp-
tion while it still exists.

@ Interest dedactibiity.

RISK: Under present rules, you
may often have a loss when inter-
est expense on investment loans
exceeds your investment income.
You claim that loss against your
other income and save tax. Ot-
tawa could restrict your interest
claim to the amount of your in-
vestment income, as it once tried
to do.

WHAT TO DO: If borrowing
to invest makes sense for you,
take out these loans today. Even
if the rules change, existing ar-
rangements might be allowed to
continue. (People who had already
borrowed to make registered
retirement savings plan contribu-
tions were allowcd to continue to
deduct the interest even after the
rules changed to disallow interest
deductions on new RRSP loans.)

Jastadl Ure: bes (}--—-————-—-—_—_
GENUINE: NISSAN PARTS

@ RRSP limits.

RISK: Ottawa has already
delayed increasing the limits on
RRSP contributions. This trend
could continue, or the limits
themselves could be reduced.

WHAT TO DO: Make your
maximum RRSP contributions as
soon as possible — both the 1993
amount and any ‘‘catchup’’
ainounts from 199] and 1992,

@ Tax shelters.

RISK: Ottawa has also already
tightened the rules on tax shelters
and a new government might cut
back even more.

WHAT TO DO: “If you have
decided a particular tax shelter is
an attractive investment, move
now,”’ said Zinkewich.

@ 21-year deemed-disposition rue
for trusts.

RISK: ‘*These rules have
received much attention and have
been ‘severely criticized by some
Opposition members,’ Zinkewich
said. ‘‘So the opportunities to
postpone the deemed disposition
of trust assets in. the proposed
rules (Bill C-92 — which hasn’t
been passed yet) may de restricted
or eliminated.”’

WHAT TO DO: Consider a
distribution of assets to
beneficiaries by trusts that will
face the 21-year rule in the next
couple of years.

“When a trust owns corpora-
tion shares whose value has gone
up significantly and the trust in-
denture doesn't provide for an
early distribution of assets, the
corporation may be reorganized to
freeze the value of the shares
owned by the trust, and so limit
future capital appreciation on the
trust,’’ said Zinkewich.

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
Aye., North Vancouver V7M
2H4,

FREE BROCHURE

Mortgage-Backed Securitics have
been called “Canada’s best kept
investment secret” Globe & Mail.
Consider the advantages of this
government guaranteed product:

— Highest Available Credit
Rating AAA
—High |Monthly Income
— Cashable Anytime
— Tax Advantages
—RSP/ RIF Eligible
To receive a complimentary booklet or
today's best rate call:

Mark Osachoft
661-7433

ScotiahiclLeod

Trusted investment advice since 1921

CUSTOMER CARE:

pt lO

FOR AUTORCTIVE
PARTS & SERVICE