November 18, 2021 by David Christianson
It’s been a big year in Manitoba, including three premiers (and counting?), elimination of fees on probating wills, PST changes and unlocking of locked-in registered accounts.
With November being Financial Literacy Month across the country, it’s a great time to catch up on all those changes. Here’s a partial list…
As of October 1, locked-in accounts such as a LIRA (locked-in retirement account, similar to an RRSP) or LIF (life income fund, analogous to a RRIF) can now be unlocked by anyone 65 or over, and people any age (with spousal consent) suffering a list of financial hardships.
A LIRA or LIF is created when money is rolled over on a tax-deferred basis from a registered pension plan. The locking-in is a way to make sure the assets continue to support the pension member for their life expectancy.
As well, on marriage breakdown, there is flexibility to split pension assets based on circumstances, rather than the currently mandated 50-50 or no division.
Bill 8 also allows pension plan members to opt out of pension membership at normal retirement age, while continue to work at the same employer.
When a person dies, their Will usually needs to be confirmed through probate, so that third parties like financial institutions can rely on its validity. On November 6, 2020, the previous 0.7% fee was eliminated. Probate is still required, but no fee is charged by the province.
The province giveth and the province taketh away. A number of personal services are no longer subject to retail sales tax, while others are now a target.
Personal services including haircuts under $50, non-medical skincare and aesthetician services, body modifications and spa services will be exempted from retail sales tax starting December 1, 2021. Tanning services and more expensive to be charged RST.
On the other hand, music and video streaming services, online accommodation platforms (when booking Manitoba properties) and sales through online marketplaces will now be subject to retail sales tax.
Platforms that provide these services, including sale of taxable goods sold by third parties online, will have to collect and remit the RST, whether or not the company has a presence in Manitoba. This is similar to five other provinces and the federal government rules.
Thanks to our NBF regional financial planner, Cory Papineau, for giving me a heads-up on these changes.
Remember, as well, that year end is fast approaching. The switch from cool-but-still-summery weather to full-on winter is proof of that.
Over the next month we will provide some tips on year-end tax planning and financial planning. In the meantime, ready your list of donations, potential cash needs from TFSAs, business expenses if any, and possibly RESP and RDSP contributions.
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Dollars and Sense is meant as an introduction to this topic and should not in any way be construed as a replacement for personalized professional advice.
Please consult legal, tax, insurance and investment experts for advice on your unique situation.
David Christianson, BA, CFP, R.F.P., TEP, CIM is recipient of the FP Canada™ Fellow (FCFP) Distinction, and repeatedly named a Top 50 Financial Advisor in Canada. He is a Senior Wealth Advisor & Portfolio Manager with Christianson Wealth Advisors at National Bank Financial Wealth Management, and author of the book Managing the Bull, A No-Nonsense Guide to Personal Finance.