Business TheReview Wednesday, May 30,1990 — B8 Helping the children responsibly J.H.’s mother-in-law has just sold her home and moved to a less expensive place, “She invested her profit in term deposits and will now have to pay quite a bit of extra tax on the interest she is earming,” said J.H. “Our daughter is getting mar- ried but they can’t afford to buy a home. Is there some way mom can help out the kids and also save on tax?” _ Yes. Depending on her other assets and her income needs, your mother-in-law could: — Buy a home as an investment and rent it to the kids. Mom’s rental income would be less than the interest she’d earn on the money but over the long term, she could earn a capital gain (possibly tax free) if the property rises in value. — Buy a home and let the kids gradually buy the place — or at least an interest in it — from her. ‘If the property is not in the province, a smaller loan is available. This is an outright bribe fo encourage our kids to sefile here’ — Lend the kids money to enable them to buy a home. If she didn’t need the extra income, the kids would repay only the princi- pal. If she did charge interest, she’d earn a little more than term deposits yield and the kids would pay a little less than a normal mortgage. Those are just a few ideas. Make sure you get expert legal and financial advice in making any such arrangements, for the protec- tion of all involved — and to avoid any unexpected tax consequences. Peter and Marie Baigent, of Balanced Financial Services have six children so have had to come up with a program fair to all as far as helping them with housing, said Peter. _ The Baigents are prepared to lend each child up to 10 per cent of the purchase price of a home to a maximum loan of $15,000. It’s an interest-free loan secured by a zero interest second mortgage on the home. The child must be married and the home in joint names. No payments are required but the loan must be repaid in 10 years (or sooner if the place is sold or refinanced) “because we'll then need the funds for our retirement,” said Peter. “Tf the property is not in the province, a smaller loan is availa- ble. This is an outright bribe to encourage our kids to settle here,” Peter said. The Baigents expect to eam a return on their funds through a share of any gain in the value of the child’s home. Baigent feels this gain would be considered as a capital gain, tax- tion or only 75-per-cent taxed if the exemption is used up. However, Elio Luongo, senior tax manager of Peat Marwick Thorne, chartered accountants, warned that Revenue Canada might tax such a gain as full income and proposed that sharing the purchase might be a better approach. “The second mortgage securing the loan could be considered as a participating mortgage, so the profit paid to the parents might then be considered interest or income — both of which would be fully taxed,” said Luongo. He suggested, as an alternative, that the parent(s) could be regis- tered as tenants in common on the title with, for example, a 10 per- cent interest in the property. The child’s interest would come from his or her down payment and the mortgage financing from a finan- cial institution. “Provided Revenue Canada did not view the arrangement as ‘an adventure in the nature of trade’ — in other words, the idea was not to flip the property for a quick profit — the parent’s share of the gain should then be considered a capi- tal gain.” Luongo also stressed the need to have any such arrangement care- fully structured so the child couldn’t put a second mortgage on the property, without the parent’s permission, for example, and that the parent’s interest would be bought out in case of marriage breakdown. Mike Grenby is a Vancou- ver-based columnist and independent personal finan- cial adviser; he will answer your questions as space allows in his column — write to him clo The Review, Box 2070, Sidney, B.C. V8L 3S5. Fashion show A FASHION SHOW AND entertainment aftemoon organized by Pandora’s Closet will be held at Dunsmuir Lodge, with all pro- ceeds going to the Sidney Lions/ Review Food Bank. The benefit show will feature ladies’ fashions, a belly dancer , a tap dancer and other entertain- ment, organizer Gloria Addison said. It will be held Sunday June 10 from 1:30-4 p.m., tickets are $10 each and were expected to sell out by June 1. They’re available by calling 656-6421, or 656-4169 after 6 p.m. * * THE ANNIVERSARY SPE- CIAL had to be postponed until renovations were completed but management at the Odyssia Steak 13.50% CANADA TREASURY BILLS 100% GOVERNMENT GUARANTEED RATES SUBJECT TO CHANGE House on Fifth Street in Sidney are ready now. For one evening only the restau- rant will feature 10 year-old pric- es, owners Bill and Elpida Macris said. Usually the anniver- sary is celebrated in April, since the 80-seat eatery opened in April, 1980. This year it'll be Wednesday June 6 and the special prices will be honored from 3 p.m. on. Re- opening with about 100 seats, Macris said: ““We’re ready for another 10 years of serving the Peninsula.” * kK OX A MINIATURE TELESCOPE that fits right on the lenses of a pair of eye glasses is now. available at Maycock Optical, Brian May- cock said. CAROLANN STEINHOFF A MEMBER OF THE SCOTIA BANK FAMILY Call 389-2113 ASK FOR ScotiaMcLeod 20m 8 for Lions/ Review Food Bank People with severe visual impairment can benefit from the new discovery and one UVic stu- dent was saved from having to ask fellow students what was written on the blackboard. The telescopes help people © whose sight problems affect their central line of vision, although their peripheral vision may be normal. The glasses to hold the mini- telescopes are made locally, then shipped to a lab in Virginia for installation. PARKLAND GRADUATION CELEBRATION ONE MORE DAY TO BUY YOUR TICKET BEFORE EARLY BIRD DRAW $50 PRIZE CUSTOM FASHIONS Fit Wear Fashions Ld. CLOSING BUSINESS MAY 31st Yy ° All fabrics in store up to 50% off 656-2772 ma re) RRSP . Annualized Yield 13 AY T-BILL Rate Subject : UW FUND 9733 FOURTH STREET, SIDNEY, B.C. To Change INVESTORS INFO SERVICE Term Deposits OT-Bill Savings Accounts OR.R.S.P. GR.R.IE & Annuities O Mutual Fund Broker'@ Tax Deduction Planning O Education Savings Plans O Group Benefit Programs @ Increase Business Account Interest by 3 t0 5% q Please send information on subjects checked above. Name Phone Address Postal Code GARY L. SHILLINGTION & ASSOC. 2442 BEACON AVENUE, SIDNEY, B.C. V8L 1X6 604-656-8801 STRAIGHT TALK | / ABOUT dl YOUR MONEY. [iui mmm wt | an|Feb)|Mar hay. hy Aug | Seo! Getting the most for your investment dollar is as easy as talking to the right people. For security, a higher rate of return and straight talk call Gurney Smith & Asssociates today. GURNEY SMITH & ASSOCIATES LTD. FINANCIAL CONSULTANTS ° LIFE UNDERWRITERS SUITE 6 - 9843 2nd St., SIDNEY (In Marina Court) 656-2411 1205 C Verdier Ave, (Brentwood Bay Shopping Centre) 652-1 482 he The Corporation of the District of Central Saanich NOTICE OF PUBLIC HEARING | NOTICE IS HEREBY GIVEN that all persons who deem their interest in property affected by the following proposed by-law will be afforded an opportunity to be heard on matters contained therein at a PUBLIG HEARING to be held in the gymnasium of the Keating Elementary School, 6843 Central Saanich Road, at 7:30 PM., on § Thursday, May 31, 1990: THE CORPORATION OF THE DISTRICT OF CENTRAL SAANICH OFFICIAL COMMUNITY PLAN BY-LAW NO. 974, 1990: In general terms, the purpose of the proposed by-law is to repeal Official Community Plan By-law No. 773 and adopt the revised i Official Community Plan (OCP) which will provide Central Saanich with a guide to future land use and community development decisions. As the overall document with which day to day applica- tions for zoning or subdivision must comply, the OCP becomes a | long range view of land use, and is the basis for regulatory by-laws. The policies in the OCP are intended to provide a pattern of § residential, agriculture, commercial, institutional and light industrial growth which is orderly and attractive and which respects the | physical characteristic and limitations of the land base. The OGP also provides for parks, open space and preservation of valuable natural features; which are often overlooked or difficult to regulate in short range decision making. The OCP is also intended to give residents some certainty as to what future developments may be permitted in the community, and it guides the business and development interests towards appropriate locations. The proposed by-law will apply to all land contained within the corporate boundaries of the Municipalilty; save and except the South and East Saanich Indian Reserves. AND FURTHER TAKE NOTICE that a copy of the proposed by-law may be inspected at the Municipal Clerk’s Office, 1903 Mt. Newton X Road, Saanichton, BC. between the hours of 8:30 A.M. and 4:00 PM., Monday through Friday, excluding holidays, from the date of this pubication to 4:00 PM. Thursday, May 31, 1990. For the convenience of the general public, a copy of the proposed by-law may also be inspected at the Regional Library located in the Central Saanich Cultural Centre, 1209 Clark Road, Brentwood Bay, BC, § between the hours of 10:00 A.M. to 5:00 P.M. Monday, Wednesday, | Thursday and Saturday, and 10:00 A.M. to 8:00 A.M. on Tuesday and Friday. Signed George H. Sawada Clerk Administrator