Interested in donating eligible securities to the Alzheimer Society of B.C.? Click here for a form and important contact information.

It took years of lobbying by the charitable sector, but in the May 2006 budget the federal government changed all capital gains taxes for direct gifts of publicly traded securities to a registered Canadian charity. Eligible securities include any shares, bonds, mutual funds, and stock options that are traded on a public exchange.

Since this change came into effect, Canada’s charities have already begun to see an increasing number of larger gifts being made in this advantageous way.

So, what does that mean to you? It means that you now have two options for making a charitable donation of securities for a tax benefit. You can:

• Sell the securities and donate the cash; or
• Donate the securities directly.

If you sell the securities and donate the cash, you’ll be taxed on the 50% of the capital gain from your investment. If you donate the securities directly, however, you avoid the tax and get the same tax credit.

For example, let’s say you have eligible securities worth $25,000, which you wish to gift to the Alzheimer Society of B.C. If the cost of these securities was $5,000, you have realized a capital gain of $20,000.

With either of the two options, you will receive a tax receipt for $25,000, resulting in a tax credit of $10,925*. But as you can see from the following, the second option carries the most benefit:

• With the first option, if you sell the securities and donate the cash, you will be taxed on 50% of the capital gain, resulting in tax of $4,370.
• With the second option, you can directly transfer the securities to the Alzheimer Society of B.C. This maximizes the tax benefit from your gift because, while you receive a donation receipt for the full market value of the securities, you avoid paying the $4,370 in tax.

We would be pleased to assist you and your financial advisor with donating gifts of securities directly to the Alzheimer Society of B.C. Please contact us at 604-681-6530 or toll-free, 1-800-667-3742, or click here for a form and important contact information.

This is not intended to be legal or tax advice and we strongly encourage donors to speak to their professional tax advisor before making a significant gift of publicly traded securities.

* Effective tax rate and tax credit for an individual resident in B.C. has been calculated at 43.7%.