Publicly Listed Securities

If you own stocks, bonds or mutual funds that have grown in value, you have a capital gain (and resulting taxes) when you sell them. If you hold your securities for your life, your estate will then pay capital gains tax, as any assets owned by you are deemed to have been sold and subject to taxation on the date of your death.

Generally, when publicly listed securities are transferred or sold, 50% of the capital gain is included in your taxable income. This is called an income inclusion. Depending on the original cost of acquiring your publicly listed securities, your capital gain could be as much as the full market value of your securities.

Revisions to the Income Tax Act of Canada made in 2006 and 2007 have completely eliminated capital gains tax on gifts of publicly listed securities to registered charities. As a result, if you make a gift of publicly listed securities to a registered charity, like the Fort St. John Hospital Foundation, you will avoid paying any capital gains tax. In addition, you will receive a charitable tax receipt for the full market value of your publicly listed securities, which you can use to offset other income tax payable.

Publicly listed securities include: Appreciated shares, debt obligations or rights that are listed on a prescribed stock exchange, mutual fund units, or shares and units in segregated fund trust.

What if you want to make a donation and save on capital gains tax but keep your shares in your portfolio?

Simply donate the shares to the Fort St. John Hospital Foundation and then buy back the shares on the open market. You would avoid paying capital gains tax on the shares you donated and your new holdings will have a cost base equal to the current market value of the shares, thereby reducing future capital gain.

DEPRECIATED SECURITIES

If your shares have decreased in value, you can still benefit by donating them to the Fort St. John Hospital Foundation. In addition to receiving a tax receipt for the fair market value of the shares, donating them will also result in realizing your capital loss. You can then apply the capital loss against any capital gains. The capital loss can be carried back three years and forward indefinitely.

HOLDING COMPANIES

If you hold publicly listed securities in a private holding company, the company may want to consider donating the shares to the Fort St. John Hospital Foundation. The full, nontaxable capital gain would be added to the capital dividend account where it may be paid out, tax fee, to the company shareholders.

EXCHANGEABLE SECURITIES

Revisions to the Income Tax Act of Canada made in 2008 now allow owners of securities that are not publicly traded but are exchangeable for publicly traded securities to be exempt from tax on the capital gain arising on the exchange as long as certain conditions are met.

To speak to someone personally and confidentially at the Foundation, please contact: Kelley Amboe, Executive Director by phoning: 250-261-7563 or email fsjhf@northernhealth.ca, and speak to your financial planner.

The above information is general in nature and is not legal or tax advice. We can help you realize your wish to support our hospital by working with you and your financial and legal professional advisors