Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J u n e 2 0 1 4 23 of zero. Also relatively new is a tax break extended to Americans who want to preserve land they own in Canada. The move allows for cross-border tax benefits so in addition to avoiding capital gains tax in Canada, they can claim the gift of Canadian property as a charitable donation on their tax returns in the United States. An aging population is increasingly considering what happens to property once they're gone. Some are piqued by the prospect of preserving it in perpetuity by entering into a conservation agree- ment — often called an easement or covenant, or real servitude in Quebec — through provincial legislation. The easement allows a representative from a land trust organization onto the property to inspect it to make sure the land is being preserved. The same process can also be used to protect other specific attributes of land, including property valued for its culture and heritage. And it ties future owners of the property to the terms of the conservation agreement, which the conservation organization can enforce. The use of covenants to protect property is where Marie Potvin sees a growth in transactions. The Kamloops, B.C., law- yer has been doing work on behalf of several land conservation organizations for the past 20 years. "A covenant [or easement] is a very good way to proceed," she says. "It offers security that the land will be protected" without having to give up ownership. And the covenant can be tailor-made so that it covers either a certain aspect, like prohibiting an activity like logging, or a por- tion of the property that might be ecologically significant or is home to endangered species, or it might be placed on the entire parcel. "They're very flexible instruments." In this situation, the value of the tax deduction through the federal ecological gift program is based on the assessed loss of value in the property. Because a covenant restrains future use of the property is it likely to lose value, and that's where the property owner can find a tax advantage. But, Potvin points out the reduced value may well have an impact on the municipal tax paid on the property as well. So it would be a good idea to have the land reas- sessed after the covenant or easement is in place, and then explore that possible advantage with the local tax assessment office. In addition, there might be some local incentives for areas identified as important to protect. In 2002, the B.C. government identified the Gulf Islands as an ecologically significant area and introduced tax exemptions of up to 65 per cent for protected property. "Those can be pretty important incentives for people," says Potvin. The covenant or easement approach is also being used by land conservation organizations themselves on property granted to them. Those groups will sometimes seek a covenant, allowing another organization to ensure it is being protected through annual inspections, further guaranteeing the protection of the property. For Schmolka, working as a volunteer in an area in which she has passion allows her to connect with landowners and others sharing the same values. "When we acquired our first property, our lawyer at the time asked us what we were going to do with it — expecting like all his other clients that we would be building something. Our answer of 'nothing' took him com- pletely by surprise." LIVE EVENTS DESIGNED FOR CORPORATIONS AND LAW FIRMS Thomson Reuters Legal Executive Institute is the leading provider of CLE events for the legal industry. Below you'll find upcoming live conferences that might be of interest to you and your team. You can register for yourself and any members of your department. Registration can be applied to anyone in your company – a different person could attend each event. Drafting Clearer Contracts September 11 – Boston, MA October 9 – Minneapolis, MN October 30– Washington DC November 6 – New York , NY Decmeber 11 – San Francisco, CA $895 Cloud Computing: A Practical Approach September 17 – New York, NY $795 DISCOUNTS AVAILABLE Individual Discount – Receive 15% off any individual program. Use promo code 15CORPORATE at checkout. Group Discounts – We have great group discounts available for you and your colleagues. The more events you purchase, the more you save: ȕ1VSDIBTFSFHJTUSBUJPOTHFUPGG ȕ1VSDIBTFSFHJTUSBUJPOTHFUPGG Call 1-800-308-1700 for more information or to register. 2014 Corporate Whistleblowing Forum September 30 - New York $595 The 2014 Thomson Reuters Supply Chain Sustainability Summit October 15 – New York , NY $795 Untitled-4 1 14-05-07 4:43 PM

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