52 - Wednesday, November 9, 1988 - North Shore News

NEW RULES

GAAR influences Income tax planning

From page 51 strate legitimate non-tax reasons as the main reason for this transacti- on, the growl of GAAR could well be heard — especially if the wife continued to wear ‘ther hus- band’s”’ jewelry.

Revenue Canada has just issued information Circular 88-2, General Anti-Avoidance Rule Section 245 of the Income Tax Act. (Tax lawyer and author Arthur Drache observes: ‘‘It will probably end up becoming akin to the bible for most active tax practitioners.’’)

Says the circular (you can get a free copy by phoning your local tax office): ‘tA transaction will not be an avoidance transaction if the taxpayer establishes that it is un- dertaken primarily for a bona fide business, investment or family purpose. It is important to distinguish those transactions which may have a business, in- vestment or family effect from those which have a business, in- vestment or family purpose. There ure many transactions that have a business, investment or family et- fect. which may nevertheless be avoidance transactions because the primary purpose of the transaction is to obtain a tax benefit.”’

In other words, you must do your tax planning for non-tax purposes.

“The onus is now on a taxpayer to demonstrate a non-tax oriented primary intention,’’ said Rob MacLise, tax partner of Touche Ross & Co., chartered accoun- tants.

“The net result of working in the new ‘post-GAAR’ world is the creation of a high level of uncer- tainty in the tax community."’

The GAAR circular contains 22 examples to illustrate different tax planning situations, and whether

Business

association has benefits

From page 50

and furrishings; courier service; distillers; framing; glass and glaz- ing contractor; janitorial service; linen supply and industrial gar- ment rental; moving and storage; office supplies; painting and wallpapering; racquet and fitness club; stocks and bonds; time management; trophies and laminating; wine merchants.

Said NOREX president Ward: ‘We're looking for assertive pco- ple committed to weekly meetings and to. giving and receiving business with members arJ their associates.’’

The association currently repre- sents 24 North Shore companies. The group includes representation from small business entrepreneurs as well as major corporations.

Said NOREX membership committee chairman Gough: “Bighty per cent or more of the members have been with the association for cight years or more. It’s stable and it shows that the benefits of the association are there.”

For more information contact SoAnne Ward at 985-3695 or Brent Gough at 987-4811.

GAAR would apply. Most are fairly technical and, as tax lawyer Drache notes: ‘‘Although the cir- cular provides an indication of how Revenue Canada will assess particular transactions, the views expressed (like those in all other material published by Kevenuc) are not law.

**Revenue itself is not bound by its statements in this circular and the courts may very well establish a completely different interpretation of an ‘avoidance transaction’.’*

Despite GAAR, Thorne Ernst & Whinney, chartered accountants, has found enough ways to save tax to fill a 198-page book, The Cana- dian Personal Tax Planning Guide, 1988-89 (Richard De Boo, $9.95).

Just published and edited by tax partner S. Brian Fisher, the book contains ideas ranging from phan- tom stock plans to basic family planning: for example, if your baby is born at the end of the year, you may still claim a tax credit for the full year.

Said Fisher: **This is one area of tax planning which cannot be entered into with any certainty and generally must be undertaken prior to the end of March.”

Based locally, Mike Grenby writes a ‘“money"* column which appears in newspapers across Canada; he also provides ind! id- ual financial cou, selling.

Uf you have @ wuestion or story idea, write (to Mike Grenby, Money Columnist, North Shore News, 1139 Lonsdale, North Van- couver V7A1 2H4. Mike cannot reply individually but wiil answer as many of your letters as possibie through his column.

Un It had been their daw.

She'd been praised for her brilliance at work, he'd been a clear winner on the courts. Even a casual observer could see how pleased they were.

By nightfall the day might have stopped for some. Then she said “Vistas.” and. as the city slowly travelled in a great circle below them. the evening’s dining would turn into a game — of recognizing by lights

places the’'d conquered by day.

Thev'd known the New World for its Meeting rooms and lounges. its Sunday branch. its catering, and other cuisine. Now their delight in Vistas wus unmistakeable: their

plan to return. a coriinty.

NEW WORLD

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tine Vamos HO .Caraade Vb obs Telephone ote G8 O87?

Tulbteee i SU 66a ASSL

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