EMIGRATING TO CANADA AS SELF-EMPLOYED FARMERS

The Canadian Immigration Department at the High Commission in London will require the following information, to be set out on relevant and current application forms supplied by them:

The provincial officials will normally discuss and informally review any proposals. However, no final evaluation can take place until an application for permanent residence has been submitted to a visa office in your home country. In some cases, an applicant may be requested to attend an interview at the Canadian High Commission. Due to a recent amendment to The Farm Lands Ownership Act, non-Canadians who intend to move to Manitoba may declare "qualified immigrant" status, and may acquire land without applying for exemptions. However, if they do not become permanent residents of Manitoba within 2 years, they must either sell the land or apply for an exemption or an extension of their "qualified immigrant" status.

If you require further information, please do not hesitate to contact our office, or the Canadian High Commission in London, Immigration Division, 38 Grosvenor Street, LONDON, W1X 0AA.

When a full application for immigration to Canada is made to the Canadian Embassy, there is a charge levied at the time of application. This fee schedule will be forwarded with your application forms. The present fees are: Entrepreneur/Self-Employed Immigrant - $1,975.00; Spouse - $1,475.00; each additional dependent under age 19 - $ 1 00. 00; each additional dependent age 19 and over - $1,475. 00. All Permanent Residence Application Fees for immigrants 19 years of age & over include a 'Right of Landing Fee' of $975.00. The Right of Landing Fee, unlike ALL the other fees, is refundable if an Immigrant Visa is not issued or used.

In determining suitability for immigration, the Embassy uses certain selection criteria. Emphasis is placed on the applicant's intended occupation, practical training, work experience, education, ability to communicate in English or French, and personal suitability. Employment related factors account for about half of the total possible units of assessment (points) that can be awarded. The following chart summarizes the point system.

FACTOR	UNITS OF ASSESSMENT
EDUCATION	16 MAXIMUM
SPECIFIC VOCATIONAL PREPARATION	18 MAXIMUM
EXPERIENCE	8 MAXIMUM
OCCUPATION	10 MAXIMUM
ARRANGED EMPLOYMENT OR DESIGNATED OCCUPATION	10 MAXIMUM
DEMOGRAPHIC FACTOR	8 MAXIMUM
AGE (1 0 units if 21 to 44, 2 units deducted for each year under 21 or over 44)	10 MAXIMUM
KNOWLEDGE OF ENGLISH OR FRENCH	15 MAXIMUM
PERSONAL SUITABILITY	10 MAXIMUM
BONUS FOR ASSISTED RELATIVES	5
BONUS FOR SELF-EMPLOYED IMMIGRANTS	30

In order to be admitted to Canada as a permanent resident, an entrepreneur/self-employed immigrant must receive a minimum of 70 selection units (which includes the 30 bonus points). 

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SUGGESTED BASIC CONDITIONS TO BE INCLUDED IN 'OFFERS TO PURCHASE'

1. That the Purchasers obtain their Visas, granting approval for Landed Immigrant Status by (date) or sooner if possible.

2. In the event of the death of one of the Purchasers on or before the date in #2, this offer shall not be binding on their heirs, successors, or assigns, unless they waive this condition within 30 days of death.

3. The Vendor will undertake to maintain the buildings (livestock, equipment) in at least the condition they were on inspection of property, that date being (date).

4. That Purchasers will be able to confirm through F.C.C. and/or a bank, not later than (date), all necessary financing.

5. That purchasers are able to arrange sale of their farm in (Country) no later than (date) and that the vendor will be notified of such sale within 48 hours, by fax.

6. All deposit monies shall be held in trust and placed in a Certificate of Deposit with interest accruing to the Purchasers to date of closing after which it will accrue to the Vendor.

7. Included in the attached offer are all buildings including portable structures of whatever kind that are on the property as of (date).
   
   OTHER CONDITIONS THAT MAY BE USED DEPENDING UPON FARM TYPE

8. The Vendor will be responsible to maintain the health and breeding program of the dairy herd until date of possession.

9. The Vendor will transfer to purchaser "x" number of cows. All registered animals shall remain on property, also included in the Purchase Price are "x" number of heifers, etc.

10. Vendor will maintain and transfer to purchaser, the milk quota of not less than "x" number of kgs. of B.F. daily, such transfer to be approved by the Milk Marketing Producers. The Vendor will maintain current production levels in order that the Purchaser will receive the full quota as above. All buildings and dairy equipment shall comply with M.M.P. and Agriculture Canada standards and requirements.

11. No feed or hay crop will be sold and that any hay and feed remaining on date of possession will remain and be included in the Purchase Price/be purchased at market value.

12. The Vendor will agree to advise Purchaser for "x" number of weeks after possession, in regard to previous crops, and general farm operations and maintenance.

13. All oil and mineral rights as owned by the Vendor are included and become part of the Purchase Price.

14. The vendor warrants there to be not less than "x" acres presently under cultivation.

15. All land herein described must be fall worked ( treated with fertilizer, etc.) in 19..crop year.

16. The following list of machinery is to be included in the Purchase Price. /The previously agreed value of the following machinery is (dollar amount). List machinery:................

17. Vendor has use of grain storage facilities until (end of crop year)

18. The Vendor will maintain all mechanical equipment and motor/pumps, included in this offer, in good working condition until possession.

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1. Statement of current assets and liabilities.

2. Type and years of fanning experience of principal borrower.

3. Age and experience of other family members.

4. Educational background of entire family.

5. Reference letters from applicant's previous Banker and Lawyers along with names, addresses and telephone numbers of same.

LEGAL COST

Normally, the Vendor and Purchaser will each retain their own solicitor at their own cost. As well, if the Purchaser requires mortgage financing, the mortgage lender will retain a solicitor to represent its' interests, but at the cost of the Borrower/Purchaser, and often using the Purchaser's lawyer.

For a land transaction of average complexity, the legal fee charged would likely be calculated by the solicitor as follows:

1% of the first $25,000.00 of value of land purchased, sold or mortgaged
1/2 of 1% of the next $175,000.00 of value above $25,000.00.
1/4 of 1% of the next $800,000.00 of value above $200,000.00.
1/8 of 1 % of any excess value over $ 1,000,000.00.

These rates may be open to negotiation and adjustment subject to the size and complexity of the transaction.

In addition, the lawyers for the Vendor and Purchaser will have miscellaneous other costs which will ultimately be paid by the parties themselves, e.g. the costs of obtaining tax certificates, searches of titles, caveats, and other encumbrances. The Purchaser is responsible for the fees of the Land Titles Office for registration for the transfer of land, and mortgage if any.

To illustrate document registration costs, for transfer of a property valued at $750,000.00 dollars the Land Titles Office will charge a registration fee of around $60.00. Where farmland is being purchased as a farm, and continues to be farmed as a unit, then it qualifies for exemption from the payment of Manitoba Land Transfer Tax (similar to Stamp Duty). If the property being purchased is in separate parcels, there may be a slight increase from the $60.00 fee.

UNITED KINGDOM CAPITAL GAINS TAX/ROLLOVER RELIEF

Rollover relief only relates to capital gains tax and since there are a number of other taxes which could be levied in respect of disposal of UK real property, it would be unwise to assume, in every case, that rollover relief will deal with all taxes payable on disposal of such assets. In the case of farmers, capital gains will likely arise from the disposal of an interest in land and buildings. The disposal of equipment may or may not result in a capital gain, but will likely result in a recapture of income tax allowances which would be taxable in the UK and not subject to rollover relief

In order to claim full rollover relief, the following conditions need to be satisfied.

1. The person who makes the capital gain must be carrying on a trade or business.

2. The whole of the asset must have been used, and for land it must also have been occupied, for the purpose of that business throughout the whole period of ownership.

3. The person making the disposal must re-invest the full proceeds in the acquisition of other assets which are used for the purpose of the continuing trade or the new trade.

4. The asset which is sold and the asset which is purchased must both fall within one of the specified classes of assets qualifying for the relief, however, there is no requirement that they be of the same class. Since the list includes land, buildings, fixed plant and machinery, and goodwill, there is not usually too much difficulty in satisfying this requirement.

5. The re-investment of the proceeds must take place within the period commencing one year before the disposal and three years afterwards. There are special rules for determining the date of disposal and the date of acquisition of assets, but in view of the total four year time period, there would rarely be any difficulty.

When part of the asset has not been used for business purposes and/or business use has not continued throughout the whole period of ownership, an apportionment is required. An apportionment is similarly required if not all of the asset is used for the business purposes.

The re-investment must be in new assets which are not only brought into use in the trade, but also that they must not have been acquired wholly or partially for the purposes of realizing a gain on a disposal of those assets. This would not be the case where a person acquired farm land in Canada with a view to farming that land.

To obtain rollover relief, each person has to satisfy the requirement individually. If, for example, the UK business was operated by a husband and wife partnership, and the farmland was a partnership asset then, in order that both should obtain rollover relief, both the husband and wife will have to re-invest the monies in the Canadian farm and both will have to carry on that business. Similarly, if a husband and wife partnership farmed the land but the entire land was not a partnership asset but owned by the husband, it is only the husband who would have to re-invest all the proceeds and only he would need to carry on the farming business.