Loading...
The Brussels Post, 1978-04-19, Page 16wanted to divide their farming operation among members of the next generation. Earlier this year, the govern- ment passed Bill C-11. an a- mendment to the tax act which allowed for a division of assets between existing partners in an incorporated business with a deferment of the capital gains tax. Although Bill C-11 was an improvement over previous tax laws, it still didn't allow for an incorporated farm to be divided among members -Of the next generation without paying the capital gains tax. Mr. Haney said in the case of his family's business, 31 per cent of the value of the farm's assets would have to be paid in taxes to transfer the farm to the next generation Mr,. Haney said his family would have had, to sell the farming operation, "bring in the Hutterites and have an auction sale." The tax reform now allows rollover to the the next generation and deferment of the capital gains tax which will keep the Haney operation in the family. Mr. Haney said he believes the reform came about partly from significant pressure - on the government from MPS from Western Canada. The farmer said Donald Mac donald, the former finance minis- ter, was not in favor of dividing incorporated family, farms due to potential tax abuses. However, Mr. Haney said Jean. Chretien, the present minister of finance, proved more receptive to the idea. The farmer added there will still be problems for government officials in policing legitimate divisions versus those who divide businesses solely to receive tax benefits. Although the problem of divis- ion of a family business have been solved for farmers, Mr. Haney said, "after a fair bit of study, it seems to us that the capital gains tax laws really allow large com- panies to stay large companies and prevent small companies from ever becoming large." He said the capital gains laws deal a death blow to many small businesses when taxes have-to be paid every time the business passes from one generation to the next. Mr. Haney said captial gains taxes are still "a killer to the small business. „.; Family farms get tax break THE BRUSSELS POST, APRIL 4' 6, 15 The recent federal budget offered a special plum for owners of incorporated family farms. Effective immediately, the in- corporated family farm , will re-\ ceive the same tax break as the smaller farmer when it comes to transferring farm property to sons or daughters. Until now, the "Tax-free, roll- over” has applied only to bonafide farmers rather than incorporated family operations. Under the new law, the rollover will co ver transfers to children of shares and interests in the farm coporations or partnerships. The federal budget defined qualifiers as those corporations or partnerships carrying on farm businesses in Canada who put nearly all assets into the bus- iness, and with one or more family members actively engaged, in running the farm. Mike Miller, assistant ag rep for Huron County, said the new law will likely affect 100 in- corporated farms in the county. He said according to the 1976 census, there were 97 incorporat- ed farms in Huron County. Mr. Miller said the new law may not be as dramatic a reform as it seems since many farmers incorporated their holdings with the idea of estate planning anyway. In addition to the capital gains tax break, the budget also allowed for the transfer of quotas among partners in an incorporat- ed farm. Mr. Miller said the quota transfer ' may prove even more significant than the tax breaks. He said currently quotas are essentially given to one person. Mr. Miller said the question facing farmers now is whether the quota transfer will, be 'a one-shot deal or whether it can be used again. For example, can a farmer give his son one-third of his milk quota now and one-third later, with the son assuming the final third on his father's death. Mr. Miller said farmers will have to wait and see what sort of prevision has been made under the new law regarding quota transfers. Mr. Miller added the capital gains tax break may encourage farmers who have been consider- .•r- f . Cow calf support price set Agriculture and Food 'Minister Bill Newman has announced that the support price for the 1978. beef calf income stabilization program will be 51.5 cents per pound and the enrolment fee per cow $8. All cows in the producer's possession as of April 1, 1978 are eligible for enrolment. The clos- ing date for applications is May 31, 1978. Enrolment forms will be mailed this month to producers who participated in the 1977 program and additional copies will be available from the offices of the agricultural representatives. The provisisons for the 1978 provincial plan are similar to those of 1977 but it appears there will be no federal plan this year. Last year 14,400 producers enrolled nearly 350,000 cows in the beef Calf program and receiv- ed $12.1 million in stabilization payinents. An additional $1 :4 Million was paid by the federal plan, ing incorporation to go, ahead with their plans. Ross Proctor, of Bodmin Farms, an incorporated farming operation in the Brussels area. said • the tax Worth was long overdue. Mr. Proctor said a good many farmers are incorporating today and the current reform will bring the tax situation for them up-to- date. -. Harry Haney, a Lethbridge. Alberta farmer visiting at Bodmin. Farms, has been involved in the problem of dividing an in- corporated farm among family members for so me time. Mr. Haney said the future of their family farm, a partnership between his father and uncle, was in jeoparify before the passage of the capital gains tax reform. The farmer said the two brothers BUSINESS ' . Horne Siding Aluminum Awnings, FREE MacLean Improvements -Aluminum 527-0032 ESTIMATES Windows, Railings &Vinyl Doors • . DIRECTORY income Contact KEN' & Blyth and Reasonable Ken TAX SERVICE Tax Preparation Bookkeeping BOOKKEEPING Rates McGowan - • 523-4293 8 "S -I- 170 Wallace Avenue N., Flower Phone 41."T to Zillovad grordst \PA ED VAN GEEST " 74004-4-ftse 4 2"."713 LISTOWEL, ONT. '...i. voo YOUR PERSONAL FLORIST WITH WORLD-WIDE CONNECTIONS , '''''.""'' 291-2040 Ltck.t For Feed BRUSSELS 887-6453 'BELGRAVE Universal & Fertilizer Hardware Milker CO-OP and Cleaners Petroleum WINGHAM 357-2711 • Products McGavin's We specialize FARM Sales Brussels 887-6365 Farm in a Complete EQUIPMENT and Service Walton Equipment' Line of Sea forth 527-0245 and Appliances Equipment R.R. 3 Mrs. Elma Insurance Brussels, Yvonne Agent for Fai-mers Mutual Company Knight Fire 887-6476 Anstett BULOVA . SEAFORTH Watch and - We Sell - Jewellers — ACCUTRON --- CLINTON Jewellery and Service 3 Stores — — Ltd. Repairs — — WATCHES WALKERTON • Bray Chiropractic 197 Josephine Wingham, Ontario Phone 357-1224 Street Office Merwooci R.R. TV 2 Listowel ,Appliance Refrigeration C. Smith, Service • 291-3810 Ltd Livestock BRUSSELS Phone George Local Trucking 887-6122 and Long- Jutzi, and TRANSPORT Shipping Distance (Evenings)" Brussels Service ' Pardys Sales Dairy Service Supplies • , _... 1-111N Brussels Sales, UNIVERSAL Dairy Systems Service and Installation pipelines milking parlours and RA. Walton Ltd. of 4 Brussels ‘-0-4:1 ---nkViel MILKERS 887-66'94