inspiring_care

Marketable Securities

In May 2006, the federal government eliminated capital gains tax from appreciated marketable securities donated directly to charity.

This is a wise way for your clients to make substantial gifts, compared to cash, as it eliminates tax on the capital gain thereby maximizing return on investment and providing tax credits for use against other taxable income.

Benefits:

  • When donated, eliminates any capital gains tax owing on the appreciated value of your client’s shares
  • Preferred tax treatment, allows your client to make a gift larger than they may with cash
  • Generates a tax receipt for the fair market value based on the closing price of the shares the day they are received by the charity
  • Gift can be made today or in the future through your client’s estate
  • Allows your client the satisfaction of making a current or deferred gift for the vital healthcare needs of our region.
Gift of $25,000 to charity Donate Securities Sell Securities; donate cash
Fair market value $ 25,000 $ 25,000
Purchase price of shares $ 10,000 $ 10,000
Capital gain $ 15,000 $ 15,000
Tax payable on half of gain
- $7,500 at 46 per cent (A)
$0 $ 3,450
Donation to charity (B) $ 25,000 $ 25,000
Tax relief at 46 per cent (C $ 11,500 $ 11,500
Cost of Gift (A + B – C) $ 13,500 $ 16,950

 

Gifts of Private Company Shares

For your clients who have their wealth in private company shares, in rare instances, these shares may be donated to charity. While this gift is more complex and requires substantial expert advice, it may be an appropriate alternative under certain conditions. Issues may include difficulty valuing the shares, restrictions on the shares, liquidity, potential for substantial capital gains, and associated professional advisor costs for both the donor and the charity. It will be necessary to obtain significant legal and accounting guidance from professionals skilled in facilitating gifts of private company shares, as well as involving the charity.

Benefits:

  • Generates a tax receipt for the fair market value of the shares once sold, potentially offsetting capital gains associate with the sale
  • Allows your client the satisfaction of making a substantial gift for the vital healthcare needs of the RVH community

Gifts of Flow Through Shares

Flow through shares, introduced by the federal government in the early 1990s to encourage exploration and development in the resource sector, are a special class of public securities issued by Canadian oil, gas, and mining companies. They may be of interest to high net worth individuals who are business savvy and do not object to the possibility of investment risk, as tax savings may be substantial.

Some charities will accept gifts of flow through shares, preferably when they become liquid. A charity may only issue a tax receipt for the value once the shares have been sold.

It will be necessary to obtain appropriate advice from professionals skilled in facilitating gifts of flow through shares, in addition to involving the charity.

Benefits:

  • The investor receives a tax deduction when purchasing the flow through shares
  • When donated, eliminates any capital gains tax owing on the appreciated value of your client's shares
  • When the "normal" shares are gifted to charity, the investor receives a tax receipt for the fair market value of the shares
  • Allows your client the satisfaction of making a substantial gift for the vital healthcare needs of the RVH community

Thank you for making a gift of securities to the
RVH Foundation

Making a Gift of Marketable Securities

To transfer securities to the Royal Victoria Hospital of Barrie Foundation, please complete all required information on page 2 of the linked form below, and fax to all three numbers listed on the bottom of the form (Foundation, Our Broker, Your Broker).

Gift of Marketable Securities Form