y ts =a Business Our summer series of tax ups, which ended last week, have pro- duced quite a few questions from readers wondering how the straic- gics might apply to their -situa- tions. “My mother is in her 70s Several investments raise her toual income to around $50,000 a year, putting her in a fairly high tax brackets. Her will Icaves every- thing to her children. Is there any advantage to my mother giving the children part of their inheritance now??? .- R.M. Yes, if your mother reduces some. of her investment capital, her income.— and tax. — will drop. Gifting now could also reduce future probate fees: (based on the total valuc of the estate) and minimize estate taxes if they are. ever rcintroduced. For cxample: -@ She could give away moncy or possibly the investments. (Note :. that gifting cerlain investments could trigger capital gains/losscs.) "> @ She could make. interest-free’ loans (forgivable on death?).to the — children to pay off their mortgages or other debts, or to buy homes. ® She could put money. into a registered cducation savings plan : for the grandchildren; the moncy - would grow tax-free and she could ° : withdraw her-capital at any’ time ” : (subject to the RESP’s rules). Lowering her-income: ‘through a any. of these approaches ‘will-cer-. : ~ tainly: lower her tax bill:This_ year, ° she will pay almost 41 per-cent tax’ ~ - On every. | dollar’ of i income above Z $27,803... ae © Also, ifher, income rises “above aes $50,000; ‘she will have to-pay back ’ part of her: Old ‘Age Security ~~ pension. But: make sure everybody. ‘involved: feels comfortable: Don't.” loo : high'a price to pay. lo. save some : cause a family: fight. That's fAX. “My husband always: includes my investment income on his. tax. return — most of our investments are in- joint names :— and pays ~ quite a bit of tax. [have worked over the years but won't get much CPP, so my husband has. split his CPP pension with me. Could 1 report the investment income to _ lower his tax?”- VR. Revenue Canada doesn’t care about the registered. name. or” “Whose names, but asks only: money went into the investment?” As. long as you can show you earned (inherited, won, cite.) the money, then you can report the “income this money produces. perhnenont Ua AAR ed Fb A Eth We HE RETR ROR RINE a NNER RD Question and answer time’ By the way, you could probably ask Revenue Canada to go back to reassess up to the past three years so you, instead of your husband could report your invesiment income. You might owe some back tax, but. your husband’s refund would be more than what you would have to. pay. “We have sold our house and bought a condominium, That gives | us an exua $70,000. How should we invest it?” .- P.O. Review some of the approaches mentioned carlier in this column to help minimize tax. If you both contributed cqual capital to buy the home you just sold, then you should invest that $70,000 equally — and each claim up to $100,000 of subsequent capital gains tax-free. Review your RRSP strategy. Will the tax you: save by contribut- _ing now. plus the tax-free growth in the RRSP more than make up for _the tax you have. to pay when you withdraw the money? If.so and if you have regular " pension income, you could contri-: bute part of the $70,000 (up to the total: of all the pensions) to your own RRSP. Also look.at the new, $6,000 Spousal contribution based “on your priv, ate (not CPP or OAS), : pension. income: .. Some: moncy might: go into. | ~ guarantecd: investments while: -some could go forthe higher ff -risk/reward’ of. an. investment ‘in. le stocks, revenue © property 0 ora busi-- Ae “Ness venture. ae “How do T-bills work?” Canada Treasury: bill, you lend the government (for example) $45,000. ft today and. one. year from now receive $50,000. What you pay for: this $50,000 T-bill depends on the interest rate. The difference between what you pay (shop and | compare prices. among, banks and NM - When you buy a:government of” | brokers) and what you get os Interest, NOt A capital gain: Tf you sell your T-bill belore it matures (lerms run up to one year), you might have a-capital gain or loss on the principal,. depending on whether rates have fallen or | risen (respectively) since you bought the T-bill. “Is it possible to give our daughter. and her husband finan- cial planning as a gift? We don’t want to advise them — they prob- ably wouldn’t listen to us anyway! — but would like them. to learn their best options for using and controlling their finances.” - A:L. Most fee-for-service financial planners. would be delighted to ‘provide a gift certificate for.a consultation to give to your daugh- tcr.and son-in-law. Expect to pay from_a couple of hundred to sev- eral: thousand dollars, depending on how comprehensive a financial “plan ‘you. feel would be appropri- ale, 2 Ask financially aware friends for the names of their advisers. ‘Look in. the yellow. pages under. ‘‘finan- . cial planning .consultants.” . S.A.M. encourages * FAIR EXCHANGE. SL 1625. 116 $13." 2.33 $14. 3.49 $15. ‘4.65 $16. 5.81. $17. 6.98 $18. 8.14 $19. 9.30. $20. 10.46. $25. 11.63. $30. $11 12.79° $40. = $46.50 - $12, = $13.95 $50. = $58.13 | Retailers please place this table . on your cash register: $18.60 © $19.66 $20.93 $22.09 - $23.25. $29.06 $34.88 PAARL eee s $ $, $ $ $ $ = § § $ $ $ ow a ea a ean ie won a Ye CURRENT RATES SUBJECT TO CHANGE One Year: - 11 ail Two. Yoars: 10.75. ROYAL TRUST HAS OPENED | A FINANCIAL SERVICES OFFICE IN SIDNEY Robert Parris wil bo available to as sist you with tho following: Personal Financial Planning Will and: Estate Planning . * Investment Management: Tax Planning ne - ees and Thursdays 9am.—5S pm, 9830 - ‘4th St. Sidney 655-3307 — (MeKimm and Lott Office Building) » ROYAL Where advice comes popeecruererenctespvanberiaiamanabesmensirevoveneat Three Years. | 10.50 Four Yoars 10. 50 Fivo Yoars 10.50% | G.L.C's/Term Deposits RRSP'SRRIFS ~ Morigages/Linas ¢ of Crodit Mutual. Funds -- TRUST | S first “RATE AS OF SEPT. 1/ 89. |]. $15.11 ft $16.28. fh $17.43. TheReview 2475A BEACON AVE. 655-1303 TOWN OF SIDNEY NOTICE Wednesday, September 6,1989 — A23 Are you interested in designing a logo for the Sidney Historical and Whale Museum? If so, please submit your proposal to the undersigned by September 29th, . 1989. Elements to be included in the logo are:- 4. the S.S. “Iroquois” or other historical item 2. recognizable whales seen from Sidney shore 3. Mt. Baker and Gulf Islands. For further information please contact the Museum Director at 656-1322. { y “ : | New fashion ¢ G.S. Logan. ACLS., PAdm., C.M.C.. Administrator, Town of Sidney’ 2440 Sidney Avenue, Sidney, B.C. V8L_1Y7 . colours to express your style If you have a colourful imagination, ‘Tet it take flight with Designer Solarian® I Floral Valley and Designer Solarian™ Lancashire Garden, . two new lines of @asy ¢ are, Inlaid Color™ flooring. These two designs each offer 7 exciting colour combinations created ~ specifically to co-ordinate with today's most fashionable fixtures, furniture and fabrics. |: | SPECIAL PRICING IN EFFECT | | (TILL AUGUST 30, 1989 — Butler Butler Brothers | ‘FLOOR COVERING DEPARTMENT | | & avlencard he Oth annus Ne | : a 7 te secure ‘ch for further informations ; cake Sept