All About Estates

Death of a Non-Resident

Written on March 7, 2014 – 7:00 am | by Derek de Gannes

Executors may find themselves representing the estate of a non-resident person – perhaps someone who was once a resident in Canada and ceased their tax residence when they left Canada. Let’s say the now deceased non-resident, X, jointly owned property in Canada which was occupied by an adult relative at the time of death.

The Canada Revenue Agency (CRA) was asked whether (i) whether the principal residence exemption would be available with respect to X’s interest in the Canadian home, and whether it is possible to transfer the interest in the home to X’s spouse on a tax-deferred basis.

On the first question, the CRA expressed the view that the amount of the capital gain that is exempt from tax (the principal residence exemption) is based on the number of years in which the property is owned by X and the number of years in which the property qualifies as the X’s principal residence during which the X was resident in Canada.

On the second question, the CRA expressed the view that a transfer of a X’s capital property to a spouse or spousal trust as a result of the X’s death may occur on a tax-deferred basis, however, the X must have been a resident of Canada immediately before death for the rollover to apply.

Be careful what you ask for and thanks for reading.

Share and Enjoy

Tags: Canada Revenue Agency, cookson walker, estate & trust, Estate Administration, estate planning

Posted in Estate Administration, Executors

Changes to Charitable Giving Introduced by Budget 2014

Written on March 6, 2014 – 8:26 am | by Laura West

Other bloggers have highlighted some of the significant changes to the Income Tax Act that were introduced with Budget 2014. I thought that I would highlight two of the more discreet changes made to two specific types of charitable giving.

Through the Ecological Gifts Program, tax incentives are provided to donors who make certain qualifying gifts of certified ecologically sensitive land. If certain criteria are met, donations of certified ecologically sensitive land qualify for charitable tax credits or deductions that can be applied against 100% of the donor’s income (as opposed to the usual 75%). Capital gains associated with such donations are also tax exempt. Currently, credits or deductions from these donations can be carried forward for up to five years. Budget 2014 proposes to extend this carry-forward period to ten years, providing additional tax incentives to donors that are designed to encourage these types of gifts.

Similar tax incentives are currently provided to donors who make certain qualifying gifts of certified cultural property but Budget 2014 did not introduce a similar ten year carry forward period for these types of gifts. Instead, because of concerns that such gifts could be the target for abuse by tax shelter promoters, Budget 2014 made certain changes to increase the regulation of such gifts. Prior to Budget 2014, qualifying gifts of certified cultural property were exempted from certain Income Tax Act rules that deem the value of a charitable gift of property to be no greater than its cost to the donor if, generally, the donor acquired the property as part of a tax shelter gifting arrangement or held the property for a short period. As a result of Budget 2014, gifts of certified cultural property acquired as part of tax shelter gifting arrangement are no longer exempted from these deemed fair market value rules; however, other gifts of certified cultural property are not impacted.

Thanks
Laura West

Share and Enjoy

Posted in Estate Planning

March Break = Break From Winter?

Written on March 5, 2014 – 6:50 am | by Audrey Miller

Are your clients/family members planning on heading south for a few weeks in this everlasting winter? While we can all appreciate a great break from the cold, there are some issues that should be part of the planning process.

Will they drive themselves? Some options include: hiring a family friend/other to drive the car down for them or with them. There are also companies that will arrange to have the car driven to their destination.

Will they fly themselves? Do they need to change planes? If this is of concern, there are companies that offer companion services who will accompany the senior for the travelling portion of the trip.

Is their medical history and medication needs up to date and clearly outlined? A pharmacy printout of the medications is a handy document.

Are their important papers, such as Powers of Attorney in place and do you know where it is kept.

Is out of province health insurance in place?

Do they carry identification and an emergency contact name with them at all times?

Have they suspended their personal emergency response system for the time they are away? (note: check if your provider will allow for suspension of service without a re-activation fee). Some companies will allow you to transfer your communicator and your response help pendant to a local provider at your temporary address.

One retirement residence provider offers their residents a one-of-a-kind travel program that invites residents to stay up to seven nights per visit at most of their 300 independent living communities across the United States and Canada, where as a guest, room, all meals, shuttle service, and participation in all programs and activities, is available at no additional expense.
How about a short term stay at a retirement residence?

A Geriatric Care Manager (GCM)can assist in locating specific resources before they head South AND a GCM can be a tremendous resource to you, should they have a crisis and need hospitalization, resource identification and support while they are away.