Law Times

PAGE 4 NEWS November 8, 2010 • Law Times Ontario Lawyer's Phone Book 2011 Your most complete directory of Ontario lawyers, law firms, judges and courts With more than 1,400 pages of essential legal references, Ontario Lawyer's Phone Book is your best connection to legal services in Ontario. Subscribers can depend on the credibility, accuracy and currency of this directory year after year. More detail and a wider scope of legal contact information for Ontario than any other source: • More than 26,000 lawyers • More than 9,300 law firms and corporate offices • Fax and telephone numbers, e-mail addresses, office locations and postal codes Lists of: • Federal and provincial judges • Federal courts, including a section for federal government departments, boards and commissions • Ontario courts and services, including a section for provincial government ministries, boards and commissions • The Institute of Law Clerks of Ontario • Small claims courts • Miscellaneous services for lawyers Contact information that is current, up to date and easy to find: • Alphabetical tabs on every page for quick reference • Complete address information in every lawyer's listing • Special binding that allows the directory to lay flat when opened and stay flat • "Blue pages" to highlight government listings ORDER your copy today Perfectbound • December 2010 On subscription $66 P/C 0514140999 One time purchase $69 P/C 0514010999 • ISSN 0845-4832 (Please add 13% HST) Tax law not just for tax lawyers BY JULIUS MELNITZER For Law Times I f people think only tax law- yers require a fundamental knowledge of tax law, they should think again. Th at's the theory behind the 2011 edition of Th e Lawyer's Guide to Income Tax and GST/HST. "Virtually every area of prac- tice except criminal law runs into tax issues, and even for criminal lawyers there are is- sues such as whether to charge GST or HST on fees and dis- bursements and whether the client can deduct the costs of legal fees," says David Sher- man, a Toronto-based lawyer and author of the guide. "Th e book tells lawyers what they need to know to address tax is- sues that come up in diff erent practice areas." Most lawyers shy away from 'Even back in law school, I could see that lawyers didn't like tax and preferred to leave it to the accountants,' says David Sherman. tax issues. "Even back in law school, I could see that lawyers didn't like tax and preferred to leave it to the accountants," says Sher- man, who usually aims his publications at tax specialists. Nevertheless, problems can arise in civil litigation, real estate, For a 30-day, no-risk evaluation call: 1.800.565.6967 Canada Law Book, A Thomson Reuters business. Prices subject to change without notice, to applicable taxes and shipping & handling. OLPB_2011 LT-1/4pg 3X.indd 1 HA1210 11/4/10 10:51:02 AM employment law, family practice, and even immigration matters. "In the litigation context, you have to analyze whether the dam- ages or settlement amounts that the client will get are taxable or not because if they are, your client may want more money," says Nigel Johnston, a partner in the tax group at McCarthy Tétrault LLP. "In a wrongful dismissal situation, the employer must with- hold taxes on any monies paid out in settlement." Indeed, there are a number of reported cases involving major law fi rms whose litigators didn't properly factor the GST into a settlement. Treating tax considerations as an afterthought, howev- er, can prove disadvantageous to a client. "Th ere are ways to frame pleadings and settlement agreements, particularly in wrongful dis- missal cases, so as to minimize the tax impact," Sherman says. "But that needs to be done at the outset in the statement of claim." On the real estate side, certain transfers of property require a LEGAL PROGRAM INSTRUCTOR triOS College Business Technology Healthcare Inc. is a top rated Private Career College with 8 locations throughout Southwestern Ontario & GTA. Our Hamilton and Brampton campuses have immediate needs for experienced licensed Lawyers or licensed Paralegals to teach our Paralegal, Law Clerk and Legal Assistant program curriculum. The successful candidate must be a licensed Lawyer or licensed Paralegal in good standing with the Law Society of Upper Canada. Ideally you will have Real Estate law experience as well as experience in Civil & Family Law and Wills & Estates. Appropriate education and 3-5 years of practical experience is mandatory. 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"Th ere have been recent amendments easing the rules, but the provisions have all sorts of traps in them," Johnston says. Otherwise, real estate lawyers acting for vendors of commercial property who agree to an amount that includes GST or HST can cause clients to forfeit up to 13 per cent of the sale price. In family law, meanwhile, there are complications quite apart from the common issue as to whether support payments have been structured in a way that makes them deductible. "When spouses transfer property, their lawyers should be watch- ing out for the attribution rules," Johnston says. "Th ey should also be watching out for the joint and several liability provisions, espe- cially in cases where a spouse with tax liability transfers property to his or her ex-spouse and doesn't get fair market value in return because the transferee spouse can be liable in such cases." Even immigration law, which isn't intuitively associated with tax problems, engages the Income Tax Act. "Lawyers who re- mind their client that as Canadian residents they must report all their global income, including off shore pensions, will be doing their client a service," Sherman says. "Immigrants can save large amounts of tax if they know what options are open to them while they are still non-resident." GST and HST are also fraught with diffi culty. While Ontario, New Brunswick, and Newfoundland have a 13-per-cent HST rate, it's 12 per cent in British Columbia and 15 per cent in Nova Scotia. "Th ere are rules about what rates lawyers have to charge and there are also cases where lawyers should only be charging the fi ve-per-cent GST," Sherman says. Simply disclaiming responsibility for tax advice and telling the client to see an accountant can be unfair to the client, he adds. "If you take the extreme example of a non-resident, he's not likely to have an accountant in Canada." To make these issues accessible to the profession, Sherman has divided the tax guide according to practice area. He follows with a general discussion of the tax system and an analysis of core areas such as capital gains. Th e work also features side notes instead of footnotes to provide ready access to sources. "Everything about tax has a codifi ed source," Sherman says. Finally, he provides a useful guide on dealing with the Canada Revenue Agency. "I run into a lot of lawyers who handle these disputes but don't know exactly where they are in the process," he says. LT www.lawtimesnews.com Multiple copy discounts available

• Cover
• Revising Retainers
• Victim Impacts
• Focus On Family Law