Turkey talk and capital gains uncertainty

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All happy families are alike, Leo Tolstoy wrote in the opening line of Anna Karenina, while every unhappy family is unhappy in its own way. But almost all families are similarly unhappy when talking about money. With that in mind, Happy Thanksgiving.

Some advisors see the autumn holiday as an opportunity for families to, well, talk turkey. But to avoid any tears or choking on stuffing, there should be a strategy. Barbara Balfour asked advisors for tips this week. Here are some highlights from her article:

• Don’t ambush anyone: Let the children know you want to talk about retirement or estate plans, for example, and even give a specific time.
• Don’t be shy about avoiding eye contact. The conversation doesn’t need to happen around the dinner table. Raking leaves has never been a more welcome distraction.
• Use prompts: For example, you read this article in Globe Advisor about discussing money over Thanksgiving weekend.
• Even better: Use the situations of family friends as cover to segue into uncomfortable terrain such as planning for long-term care.
• Don’t push it: Some people aren’t ready for these conversations, but planting the seed is still constructive. There’s always Christmas…

No thanks

First, there was the underused housing tax. Then, there were bare trusts. Now, as tax advisors wait for Parliament to pass legislation on the new capital gains inclusion rate, delays could lead to another minefield for taxpayers and the Canada Revenue Agency.

• As Brenda Bouw reported this week, the year-ends for corporations and estates designated as a graduated rate estate (GRE) often aren’t on Dec. 31, which means some corporations and GREs need to file and pay their taxes now. They just need the new forms that take the higher inclusion rate into account. So, what’s happening with those forms?
• “Accountants say they can’t file tax returns for affected taxpayers because the software isn’t yet available,” she writes. “Tax software companies say they can’t finalize the software until the legislation is passed and their forms are certified by the CRA. The CRA says the forms are expected to be ready in January, 2025 while it waits for ‘final legislative details.’”
• Corporations have six months after their corporate year-end to file their taxes, but only two or three months to pay them (depending on the type of company). GREs must pay and file their taxes within three months after their year-end date. Waiting until January may be too late.
• With a distracted Parliament and the legislation in limbo, some people are at risk of paying and filing their taxes late, which can lead to financial penalties.
• This leaves advisors dealing with “tremendous uncertainty,” and manually adjusting returns to include the higher inclusion rate may not be the best solution. Read the whole story here.

Wishing all of our readers and their happy families a stress-free long weekend. Feel free to let me know how it goes: mburgess@globeandmail.com.

Must reads

Behind the advice: Xin Lou, a wealth planner at Coast Capital Investment Management in Surrey, B.C., once dreamed of being a detective. He also had a side gig as a crypto-mining entrepreneur. In the latest instalment of our Behind the Advice series, he tells Brenda Bouw how selling suits led him to his first job in financial services. Listen to the podcast here.

Behind the succession plan: Many advisors who have a plan in place for their practice see succession as their retirement plan. Few consider the worst-case scenario such as death or disability. Deanne Gage reports on how Toronto-based insurance and financial firm Al G. Brown & Associates, founded in 1943, managed its succession after the sudden death of a senior partner. This is the third article in a three-part series. Read the first article here and the second article here.

Behind the border: Many Canadians have built businesses in other countries, have vacation homes abroad or, if they’ve immigrated here, hold assets or own properties in their land of origin. That challenges advisors to help clients address tax and asset disposition implications that might span jurisdictions. Jamie Sturgeon reports.

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