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How to Enter Transaction Levy (Ontario and Newfoundland)

Introduction

Members of the Law Society of Upper Canada and Newfoundland are required to pay a professional liability insurance levy for all real estate, civil litigation and personal property matters opened on or after April 1, 1995.

Transaction Levy Amounts

Newfoundland

  1. The Transaction Levy payable on real estate transactions is $30.00, effective 1 January 2016

  2. The Transaction Levy payable on civil litigation transactions is  $75.00, effective 1 January 2016

  3. Definition of personal property transaction – “personal property transaction” means a transaction which results in the transfer or charging of title to personal property in Newfoundland and Labrador, including but not limited to the placement of any security interest on personal property under the Personal Property Security Act (PPSA).  The Levy payable to the Society is $35 in respect of each personal property transaction in which the member acted for one or more parties.

Taxes:  HST is applied to these amounts in Newfoundland.  Firms must submit HST directly to CRA, not to the Law Society.

Source: http://www.lawsociety.nf.ca/lawyers/lawyer-regulation/law-society-rules/part-x/

Ontario

  1. Real Estate transactions: Lawyer is required to pay a professional liability insurance premium levy to The Law Society of Upper Canada $65 inclusive of taxes. There are examples of exclusions where a lawyer is exempt from a transaction Levy such as the transfer of land to a spouse.  

  2. Civil Litigation transactions: Lawyer is required to pay a professional liability insurance premium levy to The Law Society of Upper Canada $50 inclusive of taxes  (Increasing from $50 to $100 for files opened on or after January 1, 2018). In respect of each civil litigation transaction in which the Lawyer acted for a party. Exclusions are possible so the Lawyer needs to be able to exempt some types of transactions from this levy.

How to Record Transaction Levy Entries

CosmoLex has a built-in system to record and remit transaction levies. Read on to learn learn how. 

Before You Get Started

Initial Setup

If you haven’t already done so, set up your regional settings to select your province. Learn more about the regional setting.

You will find additional settings here for the transaction levy. 

  • Civil Litigation and Real Estate – check the box for the desired Transaction Levy type. 
  • For each Transaction Levy type, you will have the following options:
    • How Levy Amount Will Be Handled
      • Bill to Client – select if you will be charging the client for this fee. This option will create a disbursement for the matter and you will be able to include that disbursement in the client’s invoice.
      • Firm Expense – select if your firm will be paying this fee. This option will create a business expense, as if you were entering payments for items such as office supplies, rent, etc.
    • Handled Fee: The default amount of the type of fee. This is based on current regional mandates and cannot be changed from this screen. However, if there is a special case, the amount can be changed on a matter-by-matter basis when creating the Transaction Levy entry.
    • Bill to Client
      • Expense Item: Use the default or type in the name you would like this type of expense to show when created. 
      • Taxable: The default for this field is Yes. When billing a client, for example, the fee on the invoice will include tax.

        To learn more about HST click here.

      • Account: This shows the chart of account these fees will be recorded under.
    • Firm Expense Account: Use this to designate the chart of account you would like to assign these entries to, if they are to be tracked as firm expenses. 
    • Report InformationThe names listed by you in these fields will appear on Transaction Levy reports
      • Managing Partner
      • Firm Contact

How To Create

When you are ready to create your Transaction Levy, follow the steps below:

  1. From the Matters Tab, select desired Matter and click  Action
  2. Mouse over Transaction Levy, and click Create 
  3. Complete Transaction Levy Form
    • Date – date transaction levy was incurred
    • Payable Mode – select an option to designate this fee’s payable status
      • Ignore: use this option if you have already paid this fee and do not wish to include it in your payables at the end of the quarter. This is useful if you are logging historical entries.
      • Exempt: use this option if this particular matter is exempt from the fee
      • Payable: use this option if you would like to pay for this fee at the end of the quarter
    • Levy Type – select whether this falls under Real Estate or Civil Litigation
    • Amount – this amount is the same as the firm-wide amount shown in Regional Settings, and it is our recommended amount for the matter according to its open date. If you wish to change this amount, click the lock icon to edit. 
    • Paid By – this option will default to the setting selected for them firm in Regional Settings. You may change it here, if needed.
    • Document Registered – If needed, you may use this field to input the name of the associated document.
  4. Click Save.

All set! You have now logged a new fee for this matter. If the fee is to be billed by the client, you can include it in your invoice as you would other matter expenses / disbursements. 

How to Search and Edit

After you have entered your transaction levies, you may need to search for them to review which matters you have already applied a fee to, and which matters do not have an associated entry yet. Or, you may also wish to search by transaction levy type. Use our new search filter to find your entries.

1. From the Matters Tab, click on Advanced Search

2. Scroll down and find the filters related to transaction levies. You may select your desired parameters and view the results on the screen.

To Edit a Transaction Levy

1. From the Matters tab, select the desired matter and click  Action

2. Mouse over Transaction Levy, and click Edit

Once a transaction levy has been billed, you will not be able to edit it. Remove the expense from the invoice in order to be able to edit the Transaction Levy. Learn more.

To Remove a Transaction Levy

Expense cards associated to transaction levies may not be deleted. In order to remove a transaction levy, follow the step above to edit the entry, then click Remove.

How to Pay

At the end of the quarter, you will want to pay all relevant transaction levies at once. To do so, follow these instructions:

  1. From the Matters tab, select  Action
  2. Mouse over Transaction Levy, and click Pay 
  3. In the Pay Transaction Levy screen, there is an automatic filter to show only entries for ‘last quarter.’ Use the search filter on the right to find the levies you’d like to pay. 
  4. Click Next 
  5. Provide Payment Details
    • Bank – Confirm the desired bank is selected
    • Amount – total amount of fees selected
    • Date – date of payment
    • Transaction Type
      • Check – use this option if you would like to write a check or print one using CosmoLex
      • Wire/ACH-Out – use this option if you are paying your fee electronically
    • Transaction Method – use the appropriate method of payment. For example, you may choose Electronic Funds Transfer if you have selected Wire/ACH-Out as the transaction type
    • Payee – Type the name of the payee (i.e. Law Society of Ontario)
    • Check # – If you have selected check as transaction type, and have selected not to print from CosmoLex, type the associated check number here.
    • Memo – enter an appropriate memo note
  6. Click Next 
  7. Review Summary of transaction and click Pay 

Transaction Levy Reporting

  1. From the Matters Tab, click Action
  2. Mouse over Transaction Levy and click Report 
  3. Complete the Report Options screen 
    • Fee Type – select Real Estate or Civil Litigation
    • Entry Date – select the desired date range for entries
    • Print Format – select PDF or .csv format for downloading and printing 
  4. Click Print
Updated on January 2, 2019

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