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18 - PORT PERRY STAR - Tuesday, February 2, 1993 BR... ; RRSP's Examine your options ¢* ROBERT J. GOW 434-6161 or 1-800-267-1522 111 Simcoe St. N., Oshawa, Ontario L1G 4S4 lobert J, Gow Save an extra OOOO) OOO) Marginal Tax The concept of marginal taxis used to compare the return from investments at different levels of income. While Alberta, British Columbia and Ontario. have top marginal rates below 50 per cent in 1992, only Alber- ta will remain below 50 per cent in 1993. As marginal rates climb over 50 per cent, we again have an environment in which taxation on your investment in- come takes on increasing impor- tance. d investments Top Marginal Rates, 1992 1902 % Saskatchewan 51.6 Quebec 51.0 Manitoba 50.8 Nova Scotia 50.7 Prince Edward Island 50.7 New Brunswick 50.6 Newfoundland 50.5 British Columbia 49.9 Ontario 498 Alberta 48.7 & 1993 1983 % 40% in taxes on your RRSP contribution hile mutual funds are generally designed to reward investors in the long run, there's an investment fund that gives you an this yeat Working Ventures' objective is to produce the superior retums traditionally associated with investment in dynamic and growing businesses, immediate tax advantage. Working Ventures Canadian Fund gives you a 40% headstart over just about every other Here's an example: | - fund in Canaeb. Investment in Working Ventures ~~ $5,000 The Power Of Working Ventures Tax Savings - $2,500 Canadian Fund - RRSP tax deduction Now, you can take advantage of a unique (at 50% assumed tax rate) investment fund - Working Ventures Canadian Fund - Federal Tax Credit ($200) - $1,000 that could permit you to reduce this year's taxes by Provincial Tax Credit* $4,500! That's 40%" more than the tax benefit of just (20% where applicable) - $1,000 about every other RRSP in Canada. Your Net Cost $500 You receive $2,000 in tax credits® by investing Your Total Tax Sav $5,000 in Working Ventures Canadian Fund. Ings $4.30) The fact that Working Ventures shares are also eligible for an RRSP means further tax breaks. For instance, if you are in a 50% marginal tax bracket. a $5,000 contribution to an RRSP would reduce your taxes by a further $2,500, for a total of $4.500 (52.000 + $2,500) in tax savings'. Your investment will primarily be reinvested in promising, growth- oriented small and medium size businesses in your province. Experience That Counts Key to the performance of the fund is the expertise and experience of its management team headed by Ron Begg, President. His track record of success combines senior corporate management disciplines with the hands-on company-building skills of a successful entrepreneur. This cc ymplements well the investfent and finance background of Jim Hall, Vice-President Investments Jim has solid professional credentials from public accounting and merchant banking, and a record of originating and managing successtul imvestments. Jim offers a prudent. disciplined and seasoned approach to the development of a strong, diversified investment portfolio Discover How Working Ventures Can Work For You - | | | | | while minimizing risk through prudent development and management of the fund. Private equity investing involves certain risks that are not encountered with many other investments. Although Working Ventures provides you with a tax credit to help offset those risks, it cannot guarantee that its investments will eam a specified rate of retum, or any retum, in the short or long term. In addition, a private equity investment involves a longer term commitment. Poised For Growth Due to the current economic environment, Working Ventures is in an ideal situation, prepared to take advantage of investments in under-valued businesses and positioned to profit as the economy turns around. And, while a majority of the fund's assets will be invested in entefprising businesses 0 maximize retum potential, risk is tempered by investing a significant portion of assets in short-term, high quality government securities. The information contained herein is not complete. Prospective investors are advised 10 refer to the Working Ventures™ prospectus for complete details of the offering. Class A shares of Working Ventures are offered for sale solely under the tems of a prospectus accepted for filing in all Canadian provinces and temtones. Copies of the prospectus may be obtained only from persons duly qualified and licensed to distribute these securities The extra provincial tax credits are available to investors resident in Saskatchewan. Ontano and Prince Fdward Island Working Ventures is subject to certain mterim investment, restnctions which are desenbed in the amendment to Working Ventures: prospectus For more information, call: ROBERT J. GOW (416) 434-7156 + 1-800-267-1522 ae eh Investment advisors to Canadian enterprise ar.d enterprising Canadians 111 Simcoe Street North, Oshawa, Ontario L1H 7M9 > WORKING VENTURES CANADIAN FUND INC. SAVVY OW 0 NE _ After-Tax Retention of Interest, Dividends and Capital Gains " Invéstment income is not all taxed in the same manner. In- terest income is fully taxed, div- jdends are grossed up and re- duced by a dividend tax credit and three-quarters of capital . gains are included in income af- ter use of the $100,000 exemp- tion. The following table illus- trates the approximate amount remaining after the payment of tax on $100 of interest, divi- dends and capital gains. MR. Investment After Income Tax Provinces Other than Quebec 'Taxable Capital income Interest Dividends Gains $20501- ¢ '$59,180 $59 ~§75 $69 $59,181- $62,191 54 70 85 $69,192 & above 50 66 62 Quebec Taxable Capital income Interest Dividends Gains $29,501. i $50000 $54 $68 $66 $50,001- $59,180 53 67 6 | $59,181- $62,195 50 64 63 $69,196 . &above 49 68 &: Note to the table: for provinces other than Quebec, the rates of retention include an average provincial tax of 55 per cent. Interest income attracts the most tax. After use of the capi- 'tal gains exemption, dividends are preferred relative to inter- est and capital gains from a tax standpoint. Since interest and - dividends are taxed differently however, it's useful to have a method of comparing yields when evaluating alternative in- vestments. Dividend and interest income can be equated for an individual at the top marginal rate by: * multjplying the dividend yield by 1.3, or * dividing the interest yield by 1.3. For example, a stock paying a dividend of 5 per cent will yield the same after-tax income as a bond paying interest of 6.6 per cent. Conversely, an interest yield of 7 per cent is the same af- ter tax as a dividénd yield of 5.4 per cent. The factor of 1.3 will vary slightly between provinc- es, however it's iseful as a rule of thumb in all the most de- tailed analysis. Capital gains realized on the sale of stocks and bonds contin- ue to be an important compo- nent of the return from invest- ments. Capital gains offer the potential for growth, the only offset for inflation. Capital gains eligible for the $100,000 exemption continue to be re- duced by cumulative net invest- ment losses which for most is the excess of interest on money borrowed for investment pur- poses over interest income and grossed-up dividends, in both cases, since 1987. Courtesy of Bob Gow, Richardson Greenshields, Oshawa