v # appear in regular textbooks for at Business Employees often feel they have little scope for tax planning. Yet if you know what to look for, you can save tax. Diana (or it could be Dave) has just changed jobs. Her new posi- tion as branch manager requires Diana to use her own car about 30 per cent of the time in the busi- ness, a fact which is noted in her employment contract; she receives no tax-free car allowance. She has $5,000 in savings and ngpds another $9,000 to buy a new car. Diana is toying with the idea of cashing her $9,000 RRSP to provide the money she needs for the car. She also has $9,000 in company stock she bought over the years when she was in her last job — stock for which she paid about $1,600. Diana thought about selling this stock to raise the $9,000 she needs, but feels the stock is unde- tvalued at the moment and could gO up quite a bit over the next year or two. So she’d like to hang on to it. “Its a fairly straightforward sit- uation involving an employee with some non-RRSP savings, an RRSP and the need for a new car which will be used partly for work,” said Elio Luongo, senior tax. manager with Peat Marwick Thome, char- tered accountants. Luongo has been providing this column’s readers with a series of tax tips to give you a chance to do some planning now so filing time will be less taxing next spring. Note: The following example (which uses the combined federal- provincial tax bracket rates of 27, 40 and 46 per cent) illustrates various strategies aimed at saving as much tax as possible in one year. “Effective planning takes a much longer view, so it’s import- ant to look at your particular situation over the long term — and possibly: seek professional advice — before you take any tax-saving Steps,’ Luongo said. “Also realize that depending on the circumstances, Revenue Can- ada could use its general anti- avoidance rule (GAAR) to disal- low certain tax planning techni- ques.” Luongo said a little planning to find the best way to arrange Diana’s finances to achieve her objectives can really pay off. He suggested Diana could take the following steps: — Sell her stock to her RRSP, and receive $9,000 in cash out of the plan as the payment. This would trigger a capital gain, which could be offset by the capital gains exemption. Diana would save about $2,400 to $4,200 with this step, taking advantage of the exemption while it is still available, yet retaining her stock to benefit from the increase in value she expects in the future. — Have her employer sign the required form (12200 Declaration of Conditions of Employment) so Diana can claim her car expenses, including depreciation. This could result in tax savings over the years of about $2,900. “Diana would have to keep a log to show her business kilometres driven to support her claim,” Luongo said. Seniors, like employees, also Gran on Treasury Board Carol Gran, minister of govern- ment services and the minister responsible for women’s pro- grams, was appointed to the pro- vincial treasury board last week. The treasury board, one of the cabinet committees, is responsible for all budgetary and management Matters within the provincial gov- ermment. Premier Vander Zalm made a point of mentioning that Gran’s elevation to the treasury board was in line with a recommendation made by the Advisory Council on Community-based Programs for Women. “This appointment, along with our decision to proceed with other recommendations of the council, including pay equity, re- emphasizes our government’s commitment to assist women tow- ards economic and social inde- pendence,* the premier said. Project boosts high-tech study A two-year pilot project which will give students access to elec- tronic learning tools, was launched last week by the Education Tech- nology Centre of British Colum- bia. Eleven southern interior school ®iaistricts are participating in the $900,000 project that will enable students to electronically access databases and information systems to help them achieve the goals of their curriculum. In the initial phase, the project will support student work in the areas of science, social studies and English. In the area of social studies, for example, senior stu- dents studying 20th century his- tory will have access to on-line information services that will ena- ble them to analyze current devel- opments in Eastern Europe and the Persian Gulf, events that won’t least another five years. Participating school districts are South Okanagan, Kettle Valley, Penticton, Princeton, Revelstoke, Armstrong-Spallumcheen, Ver- non, Central Okanagan, Kam- loops, Summerland and Shuswap. - Save by knowing where to look complain that it’s more and more difficult to find tax breaks these days, especially as a result of pension and RRSP reform. Still, tax breaks do exist so be sure you don’t miss out. Mark and Susanne have been married 40 years. He’s now 72 and collects a $3,000 monthly pension (he used to be a pilot) as well as Canada Pension Plan and Old Age Security pensions. Susanne, 66, receives only CPP and OAS pen- sions. The home is paid off and their living expenses are relatively low. In fact, Mark can save about $6,000 a year from his pension income. “But because I’m over 71, I can’t put money into my RRSP any longer,” he said. “Is there any Way. we can Save tax?” Yes, says Luongo. In our exam- ple, Mark may put up to $6,000 a year of his airline pension into a spousal RRSP for Susanne. This may done only through 1994, so he should make sure he doesn’t miss this chance to save about $1,600 to $2,800 a year (depending on his tax bracket). When Susanne withdraws the money, she will probably pay back the same or less tax than Mark saved. In the meantime, the RRSP funds grow tax free and the couple can spend or invest the tax Mark saved. Because Susanne has no private pension income, she is missing out claiming the $1,000 pension income amount each year. So she should use RRSP or non-RRSP funds to create $1,000 of private pension income annually — and save $270 tax a year. TheReview Wednesday, October 3, 1990 — A19 OPEN FROM 11:00 AM DAILY LUNCH & DINNER SPECIALS SIDNEY’S NEW PUB & Fully Licensed FAMILY CAFE both with Ocean View Decks Port Sidney STRAIGHT TALK - ABOUT | YOUR MONEY. (Rates Subject to Change minout Notice) — | Sraeor eres SU ET EB Bet sankeo [Vz [Ao i JOG G0 S0eeenenon! Bug [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 & Associates today. GURNEY SMITH & ASSOCIATES LTD. FINANCIAL CONSULTANTS « LIFE UNDERWRITERS SUITE 6 - 9843 2nd St., SIDNEY (In Marina Court) 656-2411 1205 (€ Verdier Ave, (Brentwood Bay Shopping Centre) 652-1482 “(People) . complain that it’s more and more difficult to find tax breaks these days, especially as a result of pension and RRSP reform’ “ASK ME ABOUT SELF-DIRECTED LIFE INSURANCE” “Universal Life allows you to direct your. own life insurance plan. You can increase or decrease the pre- mium, stop premium payment temporarily, adjust the amount of insurance, or withdraw emergency funds when you need them. To find out more about this flexible life insurance plan call me.” PAUL DEETON 985-2111 or 656-3018 ThePrudential (wk Licensed with The Prudential Insurance Company of America, Prudential Fund Management Limited and The Prudential General Insurance Company. Mike Grenby is a Vancouver- based columnist and independent personal financial adviser; he will answer your questions as space allows in his column — write to him clo The Review, P.O. Box 2070, Sidney, B.C. V8L 3C5. WOULD YOU LIKE TO INCREASE YOUR CASH FLOW WHILE PAYING LESS TAX WITHOUT SHORT-CHANGING YOUR HEIRS? GARY L. SHILLINGTON & ASSOC. 2442 BEACON AVENUE SIDNEY, B.C. V8L 1X6 656-8801 LICENSED AFFILIATES: SEABOARD LIFE INSURANGE COMPANY. VIGTORIA ASSET MANAGEMENT, GROUP ING. For a personal weight loss program, call Diet Center. Here. we work with you to set safe weight loss goals. We help you see how you've become overweight. We teach you how to change. And we share your success when you reach. your goal. Make a personal commilment. Call us today! 902; - Start up kit. - New & former clients ° 2100 centers Dieta The difference is measurable. MARINA COURT, SIDNEY 9843 SECOND ST. VICTORIA LOCATIONS GOLDSTREAM 478-3511 DOUGLAS ST. 385-2146 y TOWN& COUNTRY 291-2146 HOURS: Mon.-Fri. 6:30 - 5:00 SIDNEY 656-9505 Saturdays ® OAK BAY AVE 598-1516 8:00 am - 11300 am SHELBOURNEST 477-7600 3 656-9505 a ; : @- Wert lsc and speed of hl sary wih india! ©) 194 ict Cote. Ing The weight-loss professionals. If it’s Sports Call the Review 656-115]