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HomeMy WebLinkAboutThe Brussels Post, 1972-11-29, Page 11Pan/ ie -7-1-/A7 WI-1/04 we, OF7P1 ee-4/OVo ari-IgRs BE paNG,,, Discusses transfer of buildings, land By J, J. ,Iiagarty .Ontario WOW)" of: Agriculture & Food,Stratford. What's wrong with my farm-. lug system? A farmer with this question. in mind, looking at his assets from the advantage of I,000 feet up, might spot some obvious problems. The layout of, buildings could be improved. The need for drainage: may be apparent,: The barnyard might he, close . and sloping towards a stream,. What may not be obvious is his lack of any plan to transfer these assets to his family. And this may be the one (*bug'? in the system: that will keep him from reaching his goal,. Tax Manage- ment will become a regular concern for more and more farm, families. They will- want to reduce and defer income tax, succession duties. and tax on capital gains. ESTATE-TRANSFERS E4tate transfers Must focus on the advisability of Selling; gifting or befleestleg various types of assets today, In light of the capital gains tax and the provincial gift taxes and succes- sion duties, should you sell, gift or bequest a particular farm asset? Generally; A gifting Program should be considered first. The most important items to gift are non-depreciable assets such as land. (E.G, sell farm and gift in lots of $2,000.through a demand note) * What you want to bequest should be considered with reference to your gifting program. The most impor- tant items to bequest are de- preciable assets (e.g. ma- chinery), income-producing items (e.g. inventory) and (possibly) basic herd ani- mals. * Anything can be sold. The priority items, however are probably rapidly appreciat- ing assets which will even- tually be subJect to a very large capital gains tax. (1)Machinery Bequesting may be the least expensive way to transfer maChinery. (a) the deemed proceeds are esti- mated to be half-way between the undepreciated capital cost and fair market value (not simply the fair market value) (b) it is Profitable (from the recipients point of view) to defer using the diminishing balance deprec- iation method. (2)Land The Ontario Succes- sion Duty has a tax-free base of $100,0000500,000 if passed to spouse). By leaving 'estates under $500,000. to a spouse, both succession duties and capital gains tax are deferred. When a person gives or wills assets to a spouse, that spouse is considered to have acquired the asset at a value equal to the original adjusted cost base of the asset. e.g. a farmer who pays $200. for an acre of land in 1972. In 1982 when the land is worth $400, his wife receives it in the will. National Revenue will consider that the value to the wife is $200. (not $400.), so there will be no gains tax paid at that time. When the wife dis- poses of the land, a capital gains tax unavoidably arises. ROLLOVERS A rollover is said to arise when capital gain or, loss is dereped for Income tax pUr- poses, In this way, an attempt Is made to lgaVe the parties in the same capital position they were in prior to the transfer, f‘Rollovers" can Occur where: (a) a capital property is trans- ferred to a corporation (b) a capital property is trans- ferred to a partnership (c) a capital, property is trans- ferred from an individual to. his (her) spouse. Capital property includes all tYpes of property; i.e. land, buildings, machinery and quota. Anyone 'considering transfer of assets should clarify goals by doing some initial planning. They should contact a chartered accountant and a lawyer before making a decision on use of the rollover provisions. At a meeting of the Huron- Perth County Roman Catholic Separate School Board Monday in Seaforth it was learned that the Advisory Committee on Family Life Education will soon be making a report of its study to the board. The 15-member Advisory Committee was started in Sep- tember,1971, by John Vintar, Superitendent of Education. The members are a cross section of representatives from across Huron and Perth Counties and include school trustees, parents, Midolrown Mayor doctors, nurses, clergy and PTA members. Dr. Charles Moyo of Seaforth is chairman. Last week the Advisory Com- mittee named six of its members, with Vincent. Young of Goderich as chairman, to make a.report on the study in order to present it to the. Board for consideration. 'Mr. Vintar outlined the Block parent Plan which is being init- iated in Stratford and the Board approved having the separate school children in the city and their parents participate. Trustee David Tea.hen of Stratford read a copy of a letter from the Ministry of the Environ- ment to the. Town of St. Marys advising of the actions required to make a decision regarding sewer connections to the proposed ad- dition at Holy Name School. Mr. Teahen said his committee is awaiting a reply to its letter to the town. When planning its new sewage program for the town the St. Marys council did not contact the school board as to its future plans for the school. The. Board acknowledged a letter from the Seaforth Re- creational Committee and will be interested in any follow-up the Committee makes. To the Electors of Brussels After serving the Village for the past 8 years, and being very interested in local projects, I would be pleased to continue serving you as in the past. Your support to re-elect me as councillor would be very much appreciated on Dec- ember 4th. Sincerely, I. G. CAMPBELL FOR REEVE RE-ELECT J. L. McCUTCHEON -For continued capable leadership for the Village of Brussels -For the man with experience and sincere determination to promote the betterment of our community for both young and old. VOTE McCUTCHEON ELECTION DAY-MONDAY DECEMBER 4th Polls open at 11 a.m. to 8 p.m. at the Old. Legion Hall For transportation call 887-6856 Huron-Perth board meets in Seaforth James Morris of Stratford, chairman of the Board, announced his intentions to bid on the two new additions to be built in 1973 -- at Holy Name School in St.Marys and at St. Aloysius in Stratford, and declared he will not partici- pate in any voting in connection with them. Mr. Morris is re- tiring from the Board at the end of December and is seeking an aldermanic seat in Stratford. David Teahen announced he would refrain from voting in connection with any tenders too, as the firm with which he is employed, is tendering on the constructions. Reporting for the Building and Maintenance Committee, Vincent Young, outlined work being done in various schools totalling about $13,000. Included in this work program are new lights at Pre- cious Blood School in Exeter, Immaculate Conception at Strat- ford, St. Mary's at Goderich and in the teacher's office at Dublin School; two new trophy cases; storm windows at Hesson; level- ling and cleaning up its recently purchased property in Seaforth; cement sidewalk from Britannia Street to St. Aloysius School in 1Stratford; replace door frames at Kinkora School; replace ceil ing tile at St. Michael's School in Stratford and possibly at Mt. Carmel and Zurich schools; mod- ify storage facilities atSt.doseph in Stratford; new fence at Wing-. ham; windows at. Goderich; new carpet for basement hall at Immaculate Conception School in Stratford and possibly at Hesson; cupboards at St. Boniface in Zurich and possibly at Ecole Ste. Marie at St. Joseph; re- moval of house at 208 Queen Street in Stratford; and possibly new roof at Holy Name School in St. Marys. The next meeting will be held on December 15. THE BRUSSELS POST, NOVEMBER 29, 1912-11