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The Rural Voice, 1982-08, Page 8someone to back you up on your thinking. And in the case of bankers and ac- countants, you rely on them. not ne- cessarily to run your business, but for advice. It's the same for feed companies, machinery companies, veterinarians." For Tuckey, those services exist to be taken advantage of. "I feel there's more help available to farmers than any other industry," he said. "There are books. courses, literature. I'm not farming to tell my neighbours how to control their weeds. 1 don't pretend to be an expert. I'd be more apt to tell you I think you snoulo contact the person that sold you the spray. People are paid to make those decisions." With access to specialists and in- formation in OMAFoffices, along with the variety of professional services available, reliance on other farmers is more for aid through a difficult situation. rather than as a regular exchange of information. In many ways. today's farmer is extremely self-reliant. There remain those areas where you need the team, though, and an instance of this was suggested by MacNeill in his reference to capital gains legislation. "The main implication with capital gains is that in a lot of cases farmers are not liquid," he said. "So, in a lot of cases when a farm is passed from one generation to the next. there is a capital gain." Often, with the hefty taxes on such gains, descendants are forced to sell the farm. But that does not have to be the case. "If there has not been proper planning, a great deal of the tax becomes payable. The general rule is that when you die you are deemed to have disposed of all your assets. But there are exceptions to all that, and those are called rollovers." Tuckey is aware of the benefits of the professional expertise. "1 got a letter from my accountant concerning capital expenses because of the provincial budget. It told me things to watch for, and I hadn't been aware of them." There are a variety of other reasons for PG 8 THE RURAL VOICE/AUGUST 1982 the move away from the older notions of teamwork. Tuckey's wife, Marjorie. said instances of city -dwellers moving into rural areas between farms, have created greater distance between neighbours. But every step towards modern teamwork has been in response to a need, be it the need tor financial planning, financial assistance or advice on equipment or chemicals. The point of it all is the word 'need'. When the need arises. the farmer responds, either by visiting an appropriate professional or by heading off to his neighbour's farm to lend a hand. Financial Aids With money concerns constantly on the minds of farmers. and in light of the flurry of budgets in the past nine months, the services of professionals become increasingly important. Jim MacNeill, a partner in Mclllhargey & MacNeill Chartered Accountants at 82 Wellington St., London, outlines some details, both in conjunction with, and as a response to. the latest federal budget of June 28. 1. Advantages of incorporation for tax purposes. With the postponement of the 121/2 per cent distribution tax until January, 1983. in the June budget. there are distinct financial advantages to the incorporated farmer. For an un- incorporated individual at the 37 per cent marginal rate (between $15,000 and $31,000 in taxable income), on $1,000 of income, he would have retained $630 after the November 12 budget. $630 after the May 13 provincial budget. and S630 after the latest budget. With the postponement. the amounts retained by the 'shareholder' in the incorporated operation are: $632 after the November 12 budget, $716 after the provincial budget, and $806 following the June budget. The difference between the individual and the shareholder is $176. 2. Special Farm Assistance Program. $200 million over two years to be delivered to the Farm Credit Corporation. Details are: - farmers in financial distress qualify. - rate is the normal FCC rate ( 16'/2 per cent). but with a rebate of four percentage points to a minimum of 121/2 per cent. - will commence -immediately, subject to available funds ("Whatever that means." MacNeill said.) - a farmer will be classified as being in financial distress if he can demonstrate that he can not survive the short term. - firms not able to obtain Small Business Bond Financing will not be considered for a loan. "The early bird gets the worm, so get in there fast if you want it," MacNeill said. "And don't count on it. And in light of the fact that it only has a two year horizon, you have to establish sound principles of financial management." 3. Small Business Investment grant. $400 million in the form of interest reduction for two years up to four per cent. Aim is to help finance new investment for small businesses. including farmers. - eligibility generally follows rules for Small Business Development Bond tax program. - handled by a financial institution. - includes purchases before March 31, 1983, of new, depreciable property. including items like tractors and com- bines, but not cars. - can be used to refinance purchases already made. - judged according to normal criteria for lending. including management, earnings security and outlook. - government pays up to four per cent to lending institution on behalf of the borrower. who makes up the difference. "In light of the fact that financing has been very difficult to secure under the Small Business Bond program, well, I don't have to tell you the conclusion," MacNeill said. "Don't count on it." "Keep an eye on the refinancing situation, just so people don't think the money is necessarily for expansion."