Capital gains exemption a tax Opportunîty 7. Principal residences will continue to be exempt from capital gains tax, and any gain on sale will not count against the lifetime exemption of $500,000. it may once again become popular to place recreation properties in the name of the spouse holding the fewest investments, since the resale wil not likely incur tax. 8. Taxpayers who fear a future change in gover- nment policy with respect to this exempt may at- tempt to take maximum advantage of the eligible amounts during the phase-in period, where possible. Since the phase-in period starts in 1985, now would seem an ideal time to review your personal invest- ments and plan for the future. WIIITBY FEIE PRESS, WEDNESDAY, NOVEMBER 6,1985, PAGE 25 ýe v /;0-- 000 By RICHARD WATSON, CA The recent federal budget contains a glittering opportunity for tax planning for many Canadians. Labelled a "major initiative to encourage invest- ment by individuai Canadians", thereby con- tributing signiflcantly to the creation of new job op- portunities, the budget proposes a tax exemption for capital gains up to a lifetime limnit of $M0,000 ($250,000 taxable capital gains). This proposed exemption is flot available to corporations or trusts (i.e. RRSP's). The exemption will apply to gains realized after 1984. It will be phased in over six years with a cumulative limit of: Tax Accumnulated Capital Gains Exempt From Tax For Tax Year $ 20,000 1985 $ 50,000 1986 $100,000 1987 $200,000 1988 $300,000 1989 $5001000 1990 and future years Certain tax planning opportunities arise as a resuit of this new exemption, including: 1. The timing of disposais of capital property wil become important in view of the phase-in of the exemption. 2. Taxpayers who intend to. incorporate an existingbusiness may wish to retain any land or buildings in their personal name, and simply lease the property to the company. Similarly, purchase of other business -real property after incorporation could be done personally rather than through the company. 3. A husband and wife may wish to own their real estate or other capital assets, in joint names, with each spouse providing their own funds. Each spouse will qualify f'or the $500,000 exemption, and therefore by 1990 they would qualify for $1,000,000 in total exempt gains. It should be noted though, in some cases, it may be necessary to hold their assets in separate names to maximize the use of the exem- ption. 4. Also by 1990 shares in certain family-owned businesses (not farms) can be transferred to children at fair market value wthout incurring tax on the first $1,000,000 of gains (assuming each parent owns one-haîf of the shares in the company). The deferral for this transaction has been $200,000 of capital gains per parent. lt will be phased out (1988) when the new capital gain exemption is $200,000. 5. Farmers disposing of qualifying farmn property will benefit immediately fromn the $50,000 exem- ption for capital gains, since the phase-in period does not apply to them. 6. There wlll be less incentive to invest in speculative types of investments through RRSP's, and more incentive to invest personally. Any capital gains realized in RRSP's would be taxed at full per- sonal rates when the funds are eventually with- drawn from the plan. Nomore need to hide your favorite picures away collecting dust. Not when you can bring them bt TEFRAMING CENTRE this week, and have themn pfesslonally framed for only two-thirds the everyday 10w pricesi! SAVE OVER 30% Favorite photos, works of art, posters, diplomas, needlework, medals, souvenirs ... DISPLAY TH EM! LET THEM BRIGHTEN UP VOUR WALLS AND VOUR HOMEI DISCOVER THE DIFFERENCE! Bring your pictures f0 THE FRAMING CENTRE this week, and discover the dfference beautîful trames make f0 your pictures! From our large 'selection, we can help you choose the f rame thats just rlght for every picture and budget. SERVICE WITH A SMILE! You'll love the prompt, friendly service you get ai THE FRAMING CENTRE. In a matter of days, your picture is framed ... ready for you 10 proudly dlspi.ay in your homel COMPLIMENTS And when your friends compliment you on your beautiful decor, you dont have f0 fell themn about THE FRAMING CENTRE. But chances are you willll IT'S O OERGTTLI' OEA THEFRAMINGCENTRE 6842 Custom Faming Ste lgM tor le LeBARON GTS PREMIUM Brand new. Included: Auto.,p.s., p.b., AM radio, defroster, dlock, w.s.w., remole mirrors, cloth buokets, deluxe w/covers. 2ý2 turbo, elecronic dash plus much more. List '14,222 Discount' 2,522 SAVE OVER 129500 3 OTES TG CHOOSE FROM WITH SIMILAR DISCOUNTS MMI 4 DR.SAVE SAVE SAVE AE7 16,877 ON TURISMOS & ncludes HORIZONS 2 2ýauto, ps, pAM radio, OVER '1,000 DISCOUN4T smdng ts ON TURISMOS & HORIZONS CHRYSIER NEW YORKER 1986 CHRYSIER LASER XT IN-STOCK READY TOGO OIISCIUNT OVER X BRAND NEW$ ;7- DISCOUNTS -. ~ON AUTHORIZED SELECIFO DISCOUNT X UNITS DEMO SALE 4r~. I I 7,M wHny n D ýE A L 5ýtý