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EE NH HE HTH Ee "A Family Tradition for 128 Years" PORT PERRY STAR - Tuesday, January 31, 1995 - 21 | | Still time for 3 million taxpayers with unused capital gains exemptions Revenue Canada Depart- ment of Finance estimates that there are over three million tax- payers in Canada with unused capital gains exemptions who, on Feb. 22, 1994 owned capital properties which had increased in value since the time of acqui- sition. In order to take full advan- tage of the tax changes for 1994, these taxpayers should consid- er utilizing the unused portion of their exemptions against any unrealized capital gains which had accrued up to Feb. 22, 1994. This is accomplished by filing an 'election' in which they can deem to have sold one or more of their capital properties on that date, thus producing an artifi- cial capital gain against which they can apply the remaining portion of their exemption. In the vast majority of cases, the election offers the taxpayer the opportunity of significant, if not enormous, tax savings. However, they must file the election by April 30, 1995 or be subject to stiff penalties. It is therefore of the utmost impor- tance that Canadians be aware of the existence of the election and its tax implications. Only the $100,000 lifetime exemption has been eliminated at this time, the $500,000 ex- emption for qualified farm and qualified small business corpo- ration shares is unaffected by the changein the tax law. However, in order for farm property to be classed as 'quali- fied," it must have been used by the taxpayer or his immediate family 'in the course of carrying on the business of farming in Canada.' There are a number of 'tests' that Revenue Canada stipulate must be met in order to deter- mine if the property is consid- ered as being used in a farming business. This means that if you own land (other than the por- tion classed as your principal residence by Revenue Canada) that is not qualified farm prop- erty, you are subject to the tax law change this year and should consider making the capital gains election. Revenue Canada consider the house and one acre as being the only portion of property as be- ing principal residence, there. are however exceptions to this rule depending upon local town- ship severance bylaws. The question arises as to how valuations should be made. In the case of stocks and shares, the taxpayer should establish their purchase price of the shares as well as the shares val- ue as of Feb. 23, 1994. In the case of real property, at this time Revenue Canada have not indicated an official appraisal to be necessary, however at the time of actual sale, they have the right to challenge the value stated on the election and if they consider the value to be in- flated, they will either disallow the inflated amount (if under 10 per cent) or impose a penalty (if over 10 per cent). In order to minimize the chance of this happening it is probably advisable to obtain a professional's opinion. Courtesy of, Rates subject to change without notice Kathl White, wisi. | SCUGOG FINANCIAL SERVICES ~ INDIVID Woodville, Ontario KOM 2T0 Lynda Van Schaik, B. Comm C.A. CHARTERED ACCOUNTANT ~ FAR JTEL (705) 374-4491 FAX (705) 374-4491 By Appointment Only GUARANTEED INVESTMENT CERTIFICATES * ANNUAL RATES - 1 YEAR......cccoeevvneecreencen. 8.2% 2 YEAR.........ccceeeueennce.n... 8.75% 3 YEAR.......ccocvceeerereenennn. 8.75% 4 YEAR.......cccooecevererenennnnn 9.0% 5 YEAR........ccccccnrineceeenne. 9.25% A DIVISION OF CRESSBROOK FINANCIAL PLANNING LTD. 250 QUEEN STREET - PORT PERRY "'Scrving Scugog for Over 15 Years" PHONE 985-3832 Many people presume that to be a suc- cessful investor you need $50,000, a lot of investment experience, and lots of free time to monitor changes in the market. But this misconception doesn't take into account other options, such as mutual funds. Managed by professionals, mutual funds enable investors, who don't have the time or experience to effectively manage their money, to pool and diversify their invest- ments while remaining liquid. By not con- centrating all their money in one invest- ment, investors reduce their risk and their money is available any time they may need it. In choosing a fund, an investor must decide what best suits his or her personal needs. Investors in Canada can choose from more than 600 mutual funds reflect- ing a variety or investment philosophies from the extremely conservative to the highly speculative. Their portfolios may include common stocks, preferred shares, precious metals, bonds, treasury bills, real estate or a combination of these types of investments. Each fund's portfolio is overseen by a professional manager or group of managers who decide what and when to buy and sell. The majority of Canada's mutual funds are open-ended, which means the investor is free to make deposits or withdrawals to or from the fund at any time they choose. The number of units an investor will receive when purchasing will depend on the value of the fund's assets at that time. When new investors join a mutual fund, their money is added to the pool, thereby increasing the fund's total assets. When an investor redeems his or her units, the amount of money received depends on the value or the fund's assets at that time. Each unit represents a fraction of the fund's total assets and has a net asset val- ue, known as NAV. The underlying value of the securities in the fund determines the value of each unit. The NAV is calculated taking all the fund's assets at market value, subtracting management fees and administrative expenses (if any), and dividing the remaining figure by the number of units. The value of most open-end mutual funds is determined on a daily basis at the close or the stock markets. However, some are valued on a weekly basis while others, fea- turing real estate investments, are valued monthly. Most mutual funds can be bought and sold on a daily basis. Less popular are the closed-end funds. As their name implies, these funds have a fixed number of units. They are usually traded on an open Stock Exchange and gen- erally sell for less than their underlying value. Mutual fund investors are charged a fee for the funds ongoing management. As for sales commissions, some funds, referred to as "front-end load", charge it up-front - the fee can be as high as 9% but is negotiable with the representatives. Other funds charge no "load" at all while others charge a "back-end load", a fee charged to the inves- tor upon redemption of the investment. This percentage is variable and usually declines over time. The debate continues as to whether "load" funds outperform "no load" funds. When mutual funds are bought as a long-term investment, however, the issue turns to the size of the annual management fee. Costs for the ongoing management of the fund generally range from 1.25 to 2% of assets a year. These costs are kept low because the investment of thousands of shareholders are being managed by one manager. Selection, versatility and long-term bene- fits. These are the hallmark of mutual funds. By choosing from a variety of options, you can reap the rewards hundreds of thousands of Canadians have already realized by investing in mutimal funds. Talk to your financial advisor to select a fund thats right for you. What's a Mutual Fund? One track mind. In 13 years of mutual fund management. Trimark's investment philosophy hasn't varied. Markets may [luctuate but Trimark's disciplined approach to stock selection never changes, TRIMARK FUND performance as of December 31, 1994 ATI 149" [50:17 169° I YEAR 3 YEARS > YEARS 0 YEARS TRIMARK CANADIAN FUND performance as of December 31, 1994 2 1 4hel 97 | 267 TURN ERY EY I YEAR 3 YEARS >) YEARS For more information on ATRIMARK MUTUAL FUNDS Wi MANAGE. TO OUTPERFORM. BOB GOW (905) 434-7156 * 1-800-267-1522 Irimark's RSP Mutual Funds contact: r 1 | | | | | | | | { | { | } | i i GREENSHIELDS 11 Simcoe Street North, Oshawa, Ontario L1H 7M9 All returns, audited by Frnst & Young, Chartered Accountants. are historical annual compounded total rates of return and reflect changes in umit value and distributions reinvested They do not take into account sales charges or admimistrative fees payable by unitholders which would have reduced retums Past performance does not guarantee future results Your unit value and mvestment return will fluctu ate Important information about any mutual fund is contained in 11s simplified prospectus: Read your prospectus carefully before investing You can obtam one from the [imancial adviser listed above Designed by Trimark Investment Management Ine Ls