New donation rules would cut tax for rich

Publicly traded securities donated to registered charities are exempt from capital gains tax. The government is now eyeing implementation of a Budget 2015 proposal that would give the same treatment to private company shares and real estate, notes Kim Moody, director at Moodys Gartner Tax Law in Calgary.

By Staff | August 31, 2015 | Last updated on September 15, 2023

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Publicly traded securities donated directly to registered charities are exempt from capital gains tax. The government is now eyeing implementation of a Budget 2015 proposal that would give the same treatment to private company shares and real estate, notes Kim Moody, director at Moodys Gartner Tax Law in Calgary.

The shares or real estate would first have to be sold to a party that’s arm’s length to both the donor and the charity. The cash proceeds would then have to be donated within 30 days of the sale.

Read: New share donation rules could improve estate planning

“On July 31, 2015, the Department of Finance released a package of technical tax amendments. The draft legislation to implement the above-noted Budget proposals was included in the package,” Moody explains. “As an aside, recall that July 31, 2015, was the Friday of the long weekend for most Canadians. The Department of Finance has a long history of releasing draft tax legislation on the Friday of long weekends.”

The new rules would kick in after 2016.

Finance has asked for comments on the proposals by September 30, 2015.

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