How to use your investments to make the world a better place

Integrating philanthropy and financial solutions

Every year, do you make a donation to various charities, hospitals or even to your children’s schools?

With this article, I would like to demonstrate how you can benefit from tax shelters while integrating your core values in the global management of your investments.

A donation is a charitable gift that is recognized

The Canadian and provincial tax legislation encourage this philanthropy in 2 ways:

• By a tax credit applicable to the entire amount of the donation to a recognized charitable organization or a philanthropic foundation ;
• By an exemption of the tax on capital gains for the gifts made to these same institutions in the form of securities. As an example, let us consider the shares of a company that are listed on the stock market and mutual funds;
• Other fiscal rules make it so that the net cost of the donation for the giver can prove to be much lower than the amount of the charitable donation.

If you hold shares that have accrued in value since their acquisition, you are able to transfer these positions directly to a charitable organization rather than selling them to make a donation.  If you chose to sell your shares, you would have to pay taxes on half of the capital gain.

*Assuming an income tax rate of 45%

** the donation is the balance left once the tax on capital gain was paid.

You now are aware of a new strategy allowing you to maximize the value of your donations while reducing your taxes.

This particular treatment opens the door to multiple scenarios, particularly in your global financial strategy.

Contact me and it will be my pleasure to give you more information on this subject.