The federal budget (May 2, 2006) provided a provision for the complete elimination of the capital gains tax on gifts of publicly listed securities to registered charities.  This new provision offers an opportunity for donors to realize significant tax savings when making a gift of appreciated secuirities to Big Brothers Big Sisters Hamilton & Burlington.

There has never been a better time to make a donation of qualifying marketable securities, including most shares, bonds, warrants and options (if listed on a prescribed stock exchange), and mutual funds.  The gift must consist of securities transferred from the taxpayer's brokerage account to the charity's brokerage account, and must not be made to a private foundation.  At no time can the securities be sold and cash realized by the taxpayer then donated.  Current Canadian income tax rules do not tax the investment value until the security is sold.

The following chart compares the net benefit of donating qualified securities vs. donating cash to Big Brothers Big Sisters.

It'is important to note that if an individual sells appreciated securities during their lifetime or if these assets are liquidated through their estate after thier death, tax must be paid on 50% of the capital gains on those securities.  This new provision provides an opportunity for donors to eliminate a significant tax liability that would otherwise have to be paid.

The type of planning that is necessary when dealing with marketable securities and charitable entities requires professional advice.  Each taxpayer's situation is unique, and consequently a consultation with a financial planner or investment advisor is recommended.

To make a donation of stock and securities to Big Brothers Big Sisters Hamilton & Burlington please contact Lisa-Marie Smith at 905.525.3860  x314 or email lmsmith@callbigbrothers.com.