May 2008

 

 

 

ALBERTA BUDGET 2008

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The following are the highlights of the tax changes announced in the Alberta budget of April 22, 2008.

 Personal Tax

  • There are no changes to personal marginal income tax rates for 2008. The highest marginal rate for 2008 for an Alberta resident is 39.00% (19.50% for capital gains, 26.46% for ineligible dividends and 16.00% for eligible dividends).
  • Beginning in 2009, the budget proposes to eliminate Alberta health care insurance premiums for all individuals.
  • The budget proposes to index all personal income tax credits by 4.7% and to make specific increases to the caregiver / infirm dependent tax credit and the disability amount tax credit for 2008. The phase-out income thresholds for certain credits have also been increased.
  • The budget proposes to enhance the Alberta Family Employment tax credit by 10% and increase the phase-out income threshold for the credit to $32,633.
  • Alberta will parallel and adopt measures previously announced in the 2008 Federal budget to introduce Tax-Free Savings Accounts beginning in 2009.

 Corporate Tax

  • There are no changes to corporate tax rates. The budget proposes to introduce a refundable tax credit available to all corporations for scientific research and experimental development (SR&ED) expenditures incurred after December 31, 2008. A 10% refundable credit will be available on expenditures up to $4,000,000 that qualify for Federal SR&ED purposes.
  • The budget proposes to parallel and adopt various capital cost allowance measures previously announced in the 2008 Federal budget.

  Previously Announced Measures

  • The budget confirmed the increase of the small business income threshold to $460,000 for periods ending after March 31, 2008 and the scheduled increase to $500,000 for periods ending after March 31, 2009.
  • The budget confirmed the Government's intention to introduce certain changes to the tax rates on dividends paid out of enhanced Alberta small business income. Technical details will be announced at a later date.
     

One of the things business owners should consider to reduce their taxes is a Private Health Services Plan, also known as a Health Spending Account.  This allows a business owner to write off a wide variety of medical expenses for themselves, their spouse and their dependents.  It can also be used to provide tax-free benefits for their employees.

The Private Health Services Plan does not have an insurance component to it and acts more like a tax deductible pay-as-you-gop program.  Through the plan, you can expense any amounts not covered by an existing medical insurance plan you have, as well as 100% of all dental procedures, prescription drugs, eyewear, physiotherapy, chiropractic visits, etc.  The list of allowable medical expenses is vast and virtually unlimited if provided or recommended by a certified medical practitioner.

The procedure to establish a health spending plan is simple and includes an inexpensive one-time fee.  Claims are processed quickly and efficiently.  The tax benefits flow immediately back to you.

For further information on the benefits of a health spending account, check out the Canadian Healthcare Administrators website at www.healthcareadmin.ca or call (403) 259-5035.

April 2008

In April the Actively Managed Portfolio gained 1.66% and is now down 7.68% for the year. This month the portfolio mobilized the 60% ‘cash’ holding and made six purchases making it fully invested by April 21.

On April 3, AGF Canadian Real Value, AGF Global Real Estate and Mackenzie Universal European Opportunities were purchased. Then on April 18, there was a buy signal for Signature Canadian Resources. The last two purchases in the month were on April 21 for Fidelity True North and Fidelity Canadian Equity.

Today the portfolio is well diversified with an emphasis on Canadian holdings and resources and the markets have shown that this is the area to be invested in.  There are no other trends our computer based trading system has uncovered while monitoring upwards to 400 funds on a daily basis. The gains we achieved the last part of April from being fully invested have carried over into the first half of May and we continue to see positive returns.

It has been a very difficult start to the year and one of the worst six month periods in the 15-year history of the AMP. One month does not confirm a trend, however, it may be an indication that one has started. The most difficult market scenario for the AMP is when there is no trend but the market takes volatile swings lasting only 3-4 weeks in both directions. It takes 2-3 weeks after a bottom to get a buy signal; then the trend only lasts for a few days before moving rapidly back down. In this kind of market conditions we stopped out with losses, whereas when volatility is not as pronounced, the AMP positions most often are exited due to stagnation, usually with small gains.

Actively Managed Portfolio Monthly Returns
Since March 27, 2003

9.83% annually since March 27, 2003 inception

Individual returns within the AIG policy may differ due to deposits, withdrawals, cost of insurance, administration fees and transaction charges.  Past performance is not a guarantee of future performance.

UPCOMING SEMINARS

Over 5,000 business people and professionals have attended Peer's complimentary seminars.

Join us for our next session. You will learn how to eliminate the tax when selling an asset, remove the "trapped" cash in your corporation tax-free and produce tax-free income. Using Peer's innovative tax saving strategies you will have a plan that will save you money this year and for years to come. By the end of the seminar you will see how you can have a comprehensive tax planning strategy unique to your situation.

Thursday, June 19, 2008
7:30 to 9:00 p.m.
Advanced Tax Planning Strategies
The Delta Calgary South - Atrium Lobby
Corner of Southland & Bonaventure Drive SE

Click here to register
or
Call Debbi at (403) 536-4691 or 1-800-414-4690