Need help filling out the w-8ben

Just need specific instructions to what needs to be filled and what doesn't.
i am a permanent canadian
and submitting this as an individual

thanks

My version, assuming an individual (Note IANAL and other disclosures to keep me out of jail and to keep the LSUC happy). If this is for a corporate entity or something more complicated then consult your accountant and/or counsel.

Part I:
1. Name - fill it in
2. Skip for individual
3. Check as appropriate - likely "Individual"
4. Residence address - fill it in
5. Mailing address - skip unless different from residence - don't abbreviate canada
6. Skip
7. Skip
8. Skip unless noted by broker - sometimes they say to add your account number.

Part II:
9. check a. and put word "Canada" on the dotted line (I'm assuming you are resident in Canada for this). Don't check any others.
10. Skip

Part III:
11. Skip

Part IV:
Sign name and date, put word "Self" on the far right dotted line asking capacity.


Done. Send back to broker and keep copy for your files.

So bmo just sent me a letter that they will be taking me to court

I'm sorry if this is a little off topic, doesn't appear to be a financial forum here. I'm curious if anyone here is familiar with our laws in this situation. I have an outstanding amount that I owe, been out of work for 7 months, but I have applied to like 50-60 jobs or more in 2011, nobody has hired me.

What will come from this? I don't own the property I live in, and I don't own any assets.

Looking for some advice on what the process is like, I cant really seek legal council since I have no money, what are my options here?

The letter tells me that they already requested a court filing and that a judgement could be made against me which would include leans on property, assets and wage garnishes.

If BMO were taking you to court, you would be served with From 7A, informing you of a claim against you in small claims court. You would then have an opportunity, within 20 business days to file a defense (form 9A). At that time, you can either dispute the charges, or propose payment arrangements. If they dispute your financial arrangements, they may take you to court and try to have a judgment filed against you on their terms.

I'm not sure if they sent you these and you just ignored them for 20 business days. If that is the case, then you are pretty much at their mercy.

If you would like actual legal counsel, there are options. I would suggest getting in touch with the CFW Group Their rates range from free to reasonable, and they will help sort you out.

1.) Get one thing through your head. At this point, your credit is already trashed for 7 years. There's not much more they can do at this point. The best thing you can do is start on the road to repairing it.

2.) If they haven't filed for a judgment, then you still have time to file a defense. Download the form here

3.) If you file a defense, there is still a 6 month waiting period before you would have a pre-trial. This gives you time to get a job, or work out some payment arrangement.

4.) I've taken the liberty of preparing a defense for you. You are going to have to edit it a little. See here

Now let's take a look at your defense, and why we're taking this angle.

1.) Notice that we're not denying that you owe them money. It's important that you agree to the sum claimed in your form 7A. A small claims court judge is going to look more favourably on a David & Goliath case like this, where David is actually taking responsibility for the money he owes.

2.) We don't want this to go to pre-trial, and neither does BMO. If it goes to pre-trial, they have to spend a few hundred bucks on a lawyer to show up and waste a judge's time. Then, if it continues going to trial, and you actually lawyer up, they could end up spending thousands, all in an effort to get a few thousand. It's in their best interest to settle.

3.) I understand that you have no money. Feel free to move the date of the first payment forward (but don't get too ridiculous) by a couple months, if you need more time to find a job.

4.) GOING FOR SUSPENSION OF INTEREST IS KEY. While you are admitting to monies owed, you will save thousands of dollars (I believe BMO charges 13.xx%) over the 30 months that you are making payments. Also notice that we are not agreeing to pay interest while the loan is in litigation. Makes sense, right?

5.) The reason I've numbered the first entries in the defense, is because if you look at the charges, they will be numbered. In your defense, you should reply to each charge that you are in dispute with, using the same numerical system as they used.

6.) Make sure where it says "NAME OF DEFENDANT" to use the exact syntax that they use in the form 7A to name you. If you go by Chris, and they call you Christopher, then your name should be Christopher.

7.) The other stuff you might erase. The reason I included the stuff about charge slips and credit limit, is because BMO tends have an opt-in process for receiving credit slips, and before Jan 1, 2010, it was legal in Ontario to raise the credit limit of a card without informing the creditor. It's my hope that a small claim's judge will recognize this.

8.) The point of this defense is not to get out of paying the money, it is to suspend interest, take responsibility for the amount owed, and come to an amicable payment arrangement that will save both of you the headache of court costs and lawyers.

Once you've filled out your defense, print it in triplicate, and take it down to the courthouse mentioned in the 7A lawsuit you received. You will need ~$45 to file it.

(Disclaimer: I'm not a lawyer.)

Manulife IncomePlus funds (and the like) , and how it affects OAS, GIS?

hello,

my parents who are in their 60s are considering incomeplus (and the like, big insurance companies has their own). they heard that it is an efficient way to get fixed income and also get the maximum OAS/GIS compared to had they invested in Life annuities.

i'm not too experienced in this, does anyone have some insight?

after going through their site, http://www.manulifegifselect.ca/incomeplus/
they actually don't explain how it is tax efficient.

i had to dig a little deeper.
i believe the gist of it is, if you hold them in a rrsp account no matter what your withdrawals out of your rrsp will be taxable income.
however in a non registered account similar to series T mutual funds, you can elect to have it withdraw a certain percent every year as Return of capital which is tax deferred. it would be like giving you your own money back, there's no tax on that. however once the principle amount dries up the rest would be taxable.
if it's taxable it may affect oas, gis.

my first time hearing about this product and it looks interesting.
it's not too clear about how the fees and mer affect payout but i'm sure those will eat at your return.

because i'm meticulous with these things (heritage funds haha inside joke)
the mer on some of their funds are quite high... as well if you pick the riskier funds there's a higher fee.
Fund Fee Rates range from 0.35% to 0.85%, depending on the risk level of the Fund.
it's likely that if you select the option to receive return of capital that will increase MER.

conclusion
probably something to look in to.
the most attractive thing is the guaranteed 5% for life if you choose the payout at 65. it's unclear if fees are still charged.
definitely not for me but for someone seeking guaranteed income and planning to live past 85, it could be worth a look.

compared with life annuities same thing if it's in a rrsp, it'll be completely taxable
if it's in a non registered account only the interest portion will be taxable.
the interest would increase your income which could potentially reduce gis and oas payments.

Canada Life Participating Life Insurance - Wealth Achiever

I have a life ot death question I got a phone call from Investors Group, spoke with them in person and they suggested the following life insurance product. This life insurance is offered by Canada Life and is called : Participating Life Insurance - Wealth Achiever
This is what they told me: The main benefit of that product is that all the investments made are tax deductible and not taxable when withdrawn(kinda like a TFSA but no 5000$ limit) However if i commit to a certain amount per month and need to make the payment otherwise there are penalties (getting smaller the closer you get to 20 years).

The example they gave me, If i put 25 000$ a year (way to much for me btw) in 20 years i can withdraw ~ 620 000$ tax free, and every year after that the amount was considerably higher. Basically, i get a 120 000$ return with 500 000$ after 20 years. That's good but the every year tax deduction is what attracts me the most.
I'll get a call within a week to buy that insurance, but since i find it to good to be true, i'm starting to have doubts.

Any useful imput would be appreciated.

This is a great question.

Participating Insurance is "permanent" insurance wherein the growth of your investment is participating in the performance of the insurance company.

THERE ARE NO TAX DEDUCTIONS FOR LIFE INSURANCE DEPOSITS..is that clear?

However, the invested value will grow on a TAX-DEFERRED basis, NOT TAX FREE.

If you withdrawal the funds, all the growth will be taxed to you as income...OUCH!!

IN order to access your funds in a "Tax free" way (as they say), then you need to obtain a loan against the value of your policy...this loan is NOT GUARANTEED and the amount of the is also NOT GUARANTEED.

Read this article on permanent insurance (sometimes called Universal Life or Whole Life)...HERE

If you don't fit the criteria, then stay away. From what you have posted so far, your are very misinformed by the advisor or not yet understanding the product. Make sure you completely understand what you are getting into before giving them any money.

don't get sold on RATE of RETURN...it is not guaranteed.

One more thing....

PERMANENT INSURANCE (like the one you're proposed) IS A TAX DEFERRAL MECHANISM...ONLY PROCEED WITH THE GO AHEAD OF A TAX PROFESSIONAL...your accountant, not a sales person.

Don't be afraid to get a second opinion from an independent advisor that you trust.

All the best.

investment property/principal residence question (no one can give me an answer

I have talked to several real estate lawyers and a few accountants and no one can give me a definite answer. Everyone seems to be telling me something different.

Here is the situation.

My parents are looking to purchase a new condo. Either 1 through assignment that closes in a couple months or 1 to 2 pre construction units that close in 2014.
If they treat this as investment property with intent to rent it out right away what kind of taxes (HST) would they have to pay on the purchase, and how much of this is refundable. I have heard rates such as 1.5%, 7.8% and 13%. Some people have said they get all of it back up to $24,000 per unit and some have said they only get up to 6% back. Everyone is giving me a different answer :S

Option 2.

The condo is purchased by them. But one of there siblings who are over 18 will live there for a bit. Since it would be a principal residence we would not have to pay any extra HST.. Say the sibling moves out and then they decide to rent the place. How are they effected? How long does the sibling have to live there? Can the property still remain as principal residence or does it have to turn into rental unit.

any help is appreciated.

AFAIK the HST rebates are only for primary residences AND NOT for investment properties.

May be this link can provide some answers http://www.rev.gov.on.ca/en/notices/hst/pdf/04.pdf

"Primary place of residence
One of the main conditions for a new housing rebate to be available is that you must buy or build the house for use as your or your relation’s primary place of residence.

Your primary place of residence is generally a house that you own, jointly or otherwise, and that you intend to live in on a permanent basis. You may have more than one place of residence, but you are considered to have only one primary place of residence.

Note
If you buy or build a new house in Canada but your primary place of residence remains outside Canada, then your house in Canada would be a secondary place of residence and would not qualify for the new housing rebate.

The following are examples of some of the factors we may consider to determine whether a house is your or your relation’s, primary place of residence for purposes of the new housing rebate:


•whether you consider the house as your main residence;
•the length of time you inhabit the premises; and
•the designation of that address on personal and public records.
To be eligible for the new housing rebate, your intent to use the house as your or your relation’s, primary place of residence must be evident at the outset of buying, constructing, or substantially renovating the house.

For rebate purposes, a house is not your primary place of residence if, for example, your intention is to use the house as your primary place of residence upon some more distant occasion, such as retirement. Further, a recreational cottage or an investment property is not your primary place of residence for rebate purposes. No new housing rebate is available in these cases." 

It's time to retire and they have no clue what to do

neither do I to tell you the truth.

Here's the situation. My parents are about to retire and they don't have a clue what to do financially.

They both have RRSPs and other assets like a house, cash, investments and so on.

The problem is that they really don't have a plan. They are old school and we really have never talked about their money. They are worried about their RRSPS and RIFS, benefits they are about to receive from the government and so on.

My problem is that I don't know much more than them. I know some basics, but I'm not an expert.

What I need is a primer on the web or a book or some advice so that I can educate myself and then offer them some very basic advice.

For starters, can anyone offer any information on what benefits they are about to collect??

Cheers and thanks in advance.

Claudio

The most pertinent question is how old are your parents or how far away are they from turning 65?

There are 4 primary sources of retirement income:

1. Canada Pension Plan - CPP

The amounts received are based on the amount an individual puts into the plan over their working career. You can start to take CPP at age 60 and must start receiving it by the time an individual turns 70. For each year before 65 you take your pension you get a couple of percent the of amount you would receive lopped off. Similarly, for each year after 65 you get an extra couple of percent. IE: if at age 65 your CPP would be $700/month, if you start taking at 63 it would end up at maybe $660/month and if you start taking at 67 you might get 750/moonth.

I believe for ppl currently turning 65, there was no incentive to wait until after 65 as the additional amount was quite small and in some cases takes years to recoup (i think for my dad it would have taken 15 years for him to have received the same total pension if starting at 70 vs 65).

I should add that you can only start taking pension before 65 if you are currently out of work. Strangely, you only have to be out of work for the month after you start receiving pension. What this means is that many ppl get their pension, dont work for a month and then go back to work while collecting their pension. It seems like a large loophole, but depending on cash flow needs ive seen many ppl do this.

In terms of getting this money, you simply have to apply. You can send in the application online which asks some ID questions, but if I remember correctly does not require any supporting information (like copies of passports etc etc). There is a signature pagethat has to be mailed in regardless of whether your file on line or not. The government determiens how much you are entitled to.


2. Old Age Security - OAS

Starts at 65. The maximum benefit is about $500 per month. The amount that an individual receives is based on how long they have been in Canada. You have to have spent 40 years since turning 18 to get the full pension. Below 40 years, you get a fraction depending on how long you have been in Canada. There are some other exceptions and rules that might specifically determine how much you will receive.

Again yuo have to apply for this. This application, unless you were born in Canada, requires proof of citizenship, and also proof showing how long you have been in Canada (so for example if you state you entered Canada december 15, 1975, you would need proof that shows that, such as the entry mark on your old passport). The govt determines how much you are entitled to.

3. Registered Retirement Savings Plan - RRSP

Money has to be moved from RRSP to an RRIF or other similar account by the time turn 69/70. There are different options. You can continue to contribute to yuor RRSP until 69 and once you are done contributing to your own you can contribute to your spouses RRSP until they are 69 as well.

4. Company pension

May or may not apply. The company and their pension provider would be responsible for determining how much you receive depending on how long you have worked, the type of plan etc. I imagine you would inform them of your retirement once you are ready to collect.


Things to consider:

-OAS gets clawed back once an individual total icnome for the year goes beyond about 65k
-Low income retirees, ie no company pension, no RRSP, are eligible for the guaranteed income supplement which adds about another 600/month to monthly pension payments


Hope this little primer helps...not an expert by any means but i do have some familiarity so id be happy to help any way i can

Loaning money to your spouse for income splitting purposes

How does this actually work for people with combined bank accounts (ie, how is the interest paid)? Would you just use the shared money and put the brokerage account in the lower income spouse's name? Would paying interest be necessary or would it be considered a gift?

Another thing (from http://www.rbcfinancialplanning.com/...t-purpose.html)

Another simple but very beneficial strategy is to use the income of the higher earning spouse to pay living expenses and tax liabilities and use the income of the lower earning spouse to make investments. This way, investment income earned will be taxed at the lower earning spouses’ rate.

Again, how would this be done if you have joint accounts? Just putting the investments in the lower income spouse's name?

 
According to the link you posted, no interest = attribution rule applies, so yes paying interest would be necessary.  I would 100% set-up separate accounts to attempt this. That way you have a paper trail to give the CRA if/when they accuse you of tax evasion (and then you can prove it was only tax avoidance, which is legal).

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As mentioned by the other poster, you need to charge interest or attribution rules will apply. It is even better to have a signed contract (see a lawyer) which states loan amount, interest rate, and repayment terms so that it is a bonafide loan and cannot be challenged by CRA. The interest rate you would want to charge would be the lowest rate you can so you are not stuck including a lot of interest income on your tax return. Check the CRA website for prescribed interest rates and use these rates as the interest rate. Hope this helps.

PS. I am a Chartered Accountant and have done this for clients in the past. With the low interest rate environment that we live in, prescribed rates are really low and can be really beneficial in income splitting and loans to spouses. 

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you should be aware your spouse is still paying you taxable interest. so you have to declare that interest as income. if you don't then you'll get hit with the attribution rules.
and this isn't a one time thing. the loan goes on until it's fully paid back, so you'll keep earning interest from your spouse until it's paid off.

just something to consider