20 - Wednesday, June 8: 19BR . North Shore News

WHEN YOU: have a_ per-
-sonial ‘emergency, you send
oul 2 an'S.0.5. : ves

“Now, Ottawa's ... hand
reaches “ever deeper into. your
pocket, threatening or actually
creating an income cmergency, you
should be sending: out an 8.0.T.

as in “save. our taxes,"

‘when.

nounced it plans ta disallow this

approach, too.'

However, you may sll split in-
come. by. giving (nots lending)
money ‘to an adult relative other
than your-spouse, or in certain sit-
uations"to-a child who is itt least
15.

(NOTE: Before you implement:
-any of these strategies, check with
2 an expert financial advis
sure they are appropriate: ‘in your *

I: to make

_ situation.) .
Let's say, for example, you have

a: 15-year-old who is likely to con-*

‘tinue his or her. education after.

_ graduating fron high school,

-Give'that child $25,000 to invest a

in’ a_three- -YCUr compound savin,

certificate .or-term deposit, When
the ‘deposit - ematures, - ‘the 18-year-
old’ will “have | (at today’s rates)
. about $33,000...

Now an adult-for: tax purposes, -

‘she ‘or. he* will declare the. $8,000, ©

interest ‘that year. (Compounding

‘ interest.;may*.be’ declared’ cither
‘every‘year or every three years.)

“But after’ claiming first-year tu-

ition” and. “other: ‘deductions. ‘and

‘credits, the’ student “will: pay “Tittle
“or no tax:— certainly less than you"

would: have aid on this $8, 000 i in

Then,” said: Walsh
dent would’buy a four-year ‘annui-
‘ty,:. which: would: produce about
’ $850 ‘a‘month:
“the student’ s living and choo! CX-

allowance. payments as cori, “Dut.

he interest this money carns can be
eclared by. the child
‘me

“That should cover. -

nto income splitt

child," Walsh said.
“You give this. policy to the
child, so the tax on the growth in

the savings part of the policy is

deferred and -eventually declared

“by the child, This benefit should

inore than outweigh the cost of the
insttrance.*
We have been talking here about

shifting interest (and possibly divi--

dend) income into the hands of. a

relative by giving money:

However, if capital gains are

‘produced by, moncy, you: give or

lend to a_ relative — cven'a young
child,

up ‘(or don’ t want to ise up) your
capital gains exemption, you could
shift capital gains into the hands of.

-somembody. else? so ‘this person.

could take advantage of the capital

gains exemption. —

“two to France. (Approximate
. value $10,000 per trip).

money 10 anybody i
spouse — to produce business in- ed -in
come. Again, this will be taxed in
the recipient's (lower-tax- bracket)
hands, noi yours.’

although not a-spouse ~~ fj Investor Relations Manager

‘this is not attributed back to you...
In other words, if, you have used

or fend.
even a.

Also, you © may “give!

your hands, that

it could. be reinvested,
second- generation

at
Here is another wrinkle,
Give or lend money en a spouse,

nat 5 FOUTS.

Majendle Securities Ltd: cordially invites you to:

: rhe Majendic. see
“Blue chip Information series

ue Featuring:
ham E,.82 ynalt

Gra
Vice Bresiaent & easurer.
imperial on | ‘BCE ine :
. Nick Majendie.”
Portfolio Strategist

June: -16th,:.1988 - 7: 00.p
: “Reservations. Re uired.
pnone 682-6

’ Lorne French.

ena Chequing, Savings
or T-Bill Account now!”

q Oe res i you rene

ur account from another

or tend money to any other: rela-
tive, While the interest. will be tax-
interest
legally belongs to the recipient..So
and © the
interest would
be taxed in: the recipient’ Ss hands,

fei