Marketable Securities

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

This is a smart way 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 shares
  • Preferred tax treatment, allows you to make a gift larger than 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 estate
  • Allows you the satisfaction of making a current or deferred gift for the vital healthcare needs of our region
Gift of $25,000 to charityDonate SecuritiesSell Securities; donate cash
Fair market value$ 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

Making a Gift of Marketable Securities

To transfer securities to RVH Foundation, please complete all required information on page 2 of the linked form below and follow all instructions.
Charitable Registration Number: 125249185 RR0001

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 shares
  • When the “normal” shares are gifted to charity, the investor receives a tax receipt for the fair market value of the shares
  • Gives you the satisfaction of making a substantial gift for the vital healthcare needs of the community

Gifts of Private Company Shares

If you have 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 associated with the sale
  • Gives you the satisfaction of making a substantial gift for the vital healthcare needs of the community