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A High-Tech Way to Stay Informed!




The family cottage: paradise for the heirs and a goldmine for the tax authorities!


It is natural for people to be attached to a place filled with pleasant summer memories, relaxation and unforgettable family get-togethers. It is also common to want to pass on to the children this home away from home, which can increase in value a great deal over time.

But did you know that when this property is transfered to the children, the tax authorities have a surprise in store for them! The heirs may have to sell the property to cover the taxes they will have to pay. Capital gains on a secondary residence is taxable.

The tax authorities: the unwanted heir!

For example:


Peter and Louise paid $30,000 for their cottage in 1980. Today, its market value is $150,000 and it is growing at about 3% per year. If the cottage is transferred to the children on the death of the second spouse, whose life expectancy is 30 years, the cottage could be worth up to $365,000 at that point. Assuming a 50% marginal tax rate, the tax payable on the capital gain is calculated as follows:


Fair market value at death


Acquisition cost


Capital gain


Taxable portion (50%)


Tax payable $167,500 X 50%




These latent taxes are a reality that few people are aware of and are a very good business opportunity for you.

Target your clients who are impacted by this situation and show them that, through life insurance, they can transfer their cottage to their children tax-free.


No need to sell the inherited property to pay the taxes, the insurance will cover it!


The Genesis Universal Life software shows the advantages offered by the ESTATE PROTECTION strategy as compared to a traditional investment in order to pay taxes at death. To find out more, see the choices available through Interface Suite home page and make your own illustrations by clicking on the Concept tab.

By using insurance:

·        The tax bill is settled for a fraction of the cost;

·        The amount covering the taxes due… and possibles even more, is paid to the heirs tax-free, allowing them to cover the other administrative fees and estate settlement expenses;

·        In the event of premature death, the face amount is immediately available whereas it takes time to accumulate the savings needed to pay the tax bill;

·        The children can receive the cottage with peace of mind!

·        This is a good reason to encourage the heirs to pay for all or a portion of the premiums since they are the first to benefit from this strategy.

The purpose of the Product News is to provide you with up-to-date information. Keep an eye on your e-mailbox to stay informed of changes made to products offered by the Precision Insurance Services Inc.

If you have any comments or suggestions regarding the Product News, feel free to e-mail us at edt@precisioninsurance.ca.


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