lifestyle not too t

Dream of moving to warmer locale helped by tax climate | AVIS M. LAPHAM

R.F.P.,CLU,CH.F.C,
Chartered Financial Consultant

. soft as the ocean breeze. And
then there’s Mike Maltin,
who has made his dream
come true, ©

--Mallin is the 51-year-old co-
author of Preparing Your Income
ax Returns, the annual best-seller
(about,60,000 copies a year) pub-
lished by CCH Canadian Limited.
The 1994 (29th) edition has just
come out.-.

.But Mallin moved to Tortola, an :

island of 14,000 people in the
British West Indies, for more than
tax reasons...
hinking about this sev
when | realized 1 -

could pack up my business in a six--,

pound computer and take it any-
where,” said Mallin trom the three:
~ bedroom house’ he bought for“
$350, 000 last September.”
“The more.winters I spentin
Canada, looking out ona parking |
lot across the street, the more it
seemed like a good idea to be some-
here warmer with a better view, l.

oh

used to like winter, but as I get
older it feels colder,” he said.

Maltin, a lawyer who specializes
in income tax, found a home 50
metres above “a lovely fittle sandy
cove — just my idea of an island
paradise.

“The only way you know it's
summer here is because the temper-
ature doesn’t drop to the tow 20s
from the high 20s, the way it does

: the rest of the year.”

~ Mallin said the pace of life is
slower,

“Things that have to get done,

’ do get done — although people

“have somewhat different ideas
about what has to get done,” he
said.

“For example, you don’t make
appointments. Jf you want to see
someone, you just drop in to the
office. If the person is busy, you
can wait or call again. It simply
isn’t the custom to ration your time
as we do in Canada.

“On the other hand, if you need
a plumber or an auto repair, it gets
done on a timely basis,” he added.

Mallin said groceries are abun-
dant and reasonably priced,
although there is a much smaller
variety of consumer goods than in
Canada: “You find what you need
~— and you find you necd less. You
do have to buy medical insurance,
costing around $2,500 a year.”

But the tax savings can more.
than make up for such additional
costs,

In Canada, once your taxable

_ income passes $30,000 a year you

pay about 40 cents in tax. for every

additional dollar of income — and
oncé you pass $60,000 you can eas- .

_ily give more than half of every
additional doBar to Ottawa.” .:°
- By contrast, Tortola has a maxi-

“ “iy ‘ mum personal tax rate of 20% and

“jn many cases doesn't tax income _
earned outside the islands. “ .. ;
The tax savings really’ begin to
. show once your income passes
$50, 000. . 5

For example, if you earn
$75,000 in Canada you might pay
$25,000 to $28,000 in tax: in
Tortola, you pay $12,600 — or less
if you have some offshore income,
said Mallin.

“Or you can work less, carn less
and, because you pay less tax, still
end up with about the same dispos-
able income here as you do in
Canada for working more,” he
added.

For most of us, who are still
paying tax in Canada, Mallin point-
ed out some changes when you file
your 1993 tax return.

(If all the proposals in the latest
federal budget become law, Maliin
will have to give up some ocean-
gazing to revise his book to deal
with the new rules starting with the
1994 tax year — especially the loss
of the $100,000 capital gains
exemption and the various ways
you can still use it for gains realized
to last Feb. 22.)

Because the child tax benefit is
means tested, based on parental _
income, one or both parents, com-
mon-law or married, must file tax
retums even if no tax is owed.

There is no longer a claim for
dependent children.

Common-law now equals mar-
ried for tax purposes. That wil] cost
you money if you used to claim the
equivalent-to-married amount fora

‘child.

On the other hand. you may now

-claim the inarried amount for a

dependent common-law spouse,
and contribute to his or her spousal
RRSP.

The special $6,000 spousal
RRSP rollover, based on regular
private pension income, expires this
year.

“Many pensioners have arranged ,

for pension income to go directly

. into the RRSP each month, so this -

will have to be ended once the con-
ribution has been made for this
year,” Mallin said, -
. Mike Grenby is a North Shore-

financial adviser who works with

based columnist and independent

individuals; he will answer your
questions in this column as space
aliows, Write to him clo The North
Shore News, 1139 Lonsdale Ave.,
North Vancouver, V7M 2H4,

call now...

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