MANY PEOPLE are still finding themselves trapped by a little-publicized rule in Ottawa’s Home Buyers’ Plan. : This plan allows you to take up te $20,000 out of your registered retirement savings plan to buy a principal residence without any immediate tax consequences. Otherwise, when you withdraw RRSP funds, they are taxed. You then have 15 years to repay this ‘loan’? from your RRSP. If you fai! to make any of the re- quired annual payments, that amount will be added to your in- come for the year and taxed. “The greatest concern is that ’ taxpayers who withdraw money from the plan and also make RRSP contributions after Feb. 25, 1992, and before March 2, 1993 — other than contributions deducted on 1991 tax returns — will find they don’t get the tax break they expected,’ tax consul- tant Mike Mallin told me. (Mallin and his co-author B.D. Hogg appear to have won the race for the first book out in the up- coming RRSP season. Uncer- standing Your RRSP, 1992.93 Edition, has just come out; at $8.95. it’s available from publishers CCH Canadian Limited. 1-800-268-4522, and might be distributed through bookstores.) : Almost one-fifth of the 100- page beok is devoted to the Home Buyers’ Plan, introduced in last February’s budget. Mallin notes the restriction on claiming an RRSP deduction for the 1992 tax year doesn’t include rollover coniributions like the special $5,000 spousal rollover, ’ the transfer of a retiring allowance (severance payment) and the rollover of a Jump sum pension amount. — “But the restriction does affect all regular contributions based on earned income,”’ he said. “People can easily run afoul of this rule without realizing it. One example: they made a contribution to the RRSP last April and then make a withdrawal from the plan next January to buy a home. Michael Grenby ¥. DOLLARS AND SENSE “Worse still is the case where an employer has been making monthly RRSP contributions di- rectly on behalf of ‘he employee.” Mallin said the caiy solution is to withdraw af -ontributions made for the 1992 iax year (after last Feb. 25) by Dec. 31, 1993; use * form T3012A. “You can then re-contribute the money after March I, 1993, and claim a deduction in 1993 — or even a future year — based on carrying forward your 1992 con- tribution room. That's the amount you would otherwise have been allowed to contribute for the 1992 tax year based on your earned income in 1997, “But you must take out the money and ther put it back in, you can’t just leave the money in your RRSP and claim the deduc- tion.”” . Mallin also pointed ovt some tax planning opportunities under the Home Buyers’ Plan although he warned if Ottawa feels abuses are taking place, it has until 1994 to adjust the repayment rules. ““For example, let’s say a hus- band takes money out of his RRSP and the wife takes moncy out of her spousal RRSP — to which the husband has made all the contributions — to buy a home. “When the money must be repaid, if the wife fails to make the required payment it will be UNICEF program aims for global immunization THE UNIVERSAL child im- munization campaign of the last decade, which has inoculated 80% of the world’s nder-onc-year- olds against six child-killin, diseases, has saved the lives of more than three million children a year, In Africa, where many countries Jack trained health workers and developed health facilities, the challenge was to reach the people in remote rural areas. Throughout Botswana, for ex- ample, in more than 200 villages, * over 25,000 school children used their weekencis to go from door to door surveying infanis’ immuniza- tion needs and making sure that their parents brought them to health centres. And although some countries have yet to reach the 80% target, they are justifiably proud of their achievements to date. In (985, oniy 2% uf the popu- fation in Bangladesh was trm- munized. Now, three out of five children have been vaccinated. Despite these incredible achievements, too many children are dying senseless deaths simply because they have aot been im- munized. : The six preventable diseases — measles, diphtheria, whooping cough, tetanus, polio and tuber- culosis ~- still claim the lives of more than two miilion children annually. UNICEF depends entirely on voluniary contributions to finance its work. Every donation will make a real difference in the life of children, say organizers. For example, just one dollar spent in a developing country will immunize 16 children against tuberculosis or seven children against measles. To immunize one child against the six leading chiid-kilfing diseases costs only $13, including the cost ef the vac- cines, needics, syringes and ade- quate cold storage. During the menth of October and on UNICEF Halloween night, UNICEF officials are hoping thar people will give generously. “Your dollars to UNICEF mean life for millions of children."" -common-law, you will have to taxed in her name. That will be an advantage if she is in a lower tax bracket than her husband — and this avoids the three-year attribu- tion rule even if he continues to contribute to her plan.’’ Under that rule, Ottawa taxes the contributor (not the withdraw- ing spouse) if money is taken out of a spousal plan: up to the amount of contributions made to any spousal plan that year or in the preceding two years. “In other words,”’ said Maliin, “routing the spousal RRSP money through the Home Buyers’ Plan gets around the three-year rule,’’ Mailin’'s book provides more details about this strategy. If you haven't used the Home Buyers’ Plan and regularly make spousal contributions, you should do so before Dec. 31. Then, if you make no further spousal con- tributions, your spouse could take out the money and be taxed on the withdrawal as early as Jan. i, 1994, if you wait until January or February to make the spousal contribution, your spouse will have to wait an extra year. “But,’’ said Mallin, “‘if you live Come experience the mystery and fascination of Malaysia at Woodward's Downtown store, this Friday & Saturday. a The National Cultural Complex performers will share with you Malaysian dancing, batik, fortune telling & tea sampling. Tourism Malaysia is proud to present these skilled artisans, don’t miss out. ‘Event-Times: . Friday, October 23rd - 4:30pm, 5:30pm & 6:30pm. Saturday, October 24th - 11:30am, 12:30pm & 1:30pm. Fill out an entry form at our downtown sicre for your chanice to win beautiful Malaysian handicrafts, or our grand prize of a trip to Malaysia. No purchase is necessary, winners will be drawn on wait until Jan. 1, 1993, to make a . October 26th. See in-store for full contest details. spousal contribution for 1992. “That's when the new law goes into effect treating common-law relationships the same as married relationships for tax purposes.”” So you aren't allowed to make a spousal RRSP contribution for a common-law spouse during the 1992 calendar year but may do so in the first 60 days of 1993 and Sis A deduct your contribution for the Bea : 1992 tax year. : ‘i 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 Lons- dale, North Vancouver V7M 2H4. sia 94% i Tl woopuny ge Emousig M Now is tne time to see how your car weathered through the summer. Watch for the Fali & Winter Car Care Guide in your Friday October 30th edition of the North Shore News. Look for practical advice on products and services to keep your car performing. From hints for the experienced do-it-yourselfer to words of advice from seasoned veterans. ‘THE VOICE OF NORTH AND WEST WAMCOULER . rs parr Pee eet orth shore BC QU )\t- FRIDAY OCTOBER 30 a amen genes : 2 , 4 amt re . SUNDAY « > FRIDAY oaty ansed aut! ee ores cae ea