Corporate Support
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Changes to Capital Gains Tax makes giving easy
Since May 2006, the Government of Canada has eliminated the capital gains tax on donations
of publicly listed securities to Canadian registered charities, including the Art Gallery of
Hamilton.
If you have been considering building your philanthropic legacy and you own publicly traded
securities, this new tax incentive may be of interest to you. It works something like this:
Pat would like to contribute to the Art Gallery of Hamilton’s Building a Legacy Campaign II. Quite a few
years ago, Pat purchased shares in Acme Inc., a publicly traded company, for $25,000. These shares
are currently valued at $100,000, and Pat is considering donating these shares to the AGH.
If Pat sells the shares first and donates the cash to the AGH, Pat would realize a capital gain of
$75,000 and pay capital gains taxes of about $17,000 on the sale. Pat would receive a donation credit
of about $45,000, but would have to subtract $17,000 in capital gains, leaving Pat with a net tax benefit
of approximately $28,000.
But if Pat donates the shares (by transferring them through a broker to the AGH) to the Art
Gallery of Hamilton, the capital gains tax would be eliminated altogether, and the net tax benefit
would be about $45,000.*
*Kindly note that the above example is for illustration purposes only, and is based on the assumption
that the donor is in the top marginal tax bracket. Please consult your financial professional for information
on how a donation of securities applies in your unique situation.
John, a long-time supporter of the Gallery, recently took advantage of the new exemption:
"Even before the budget announcement, I was seriously considering donating to the Gallery, but the
new tax break offered an impetus to give," he said. "Once I explored this option further and transferred
the shares through my broker, I saw how simple it was to execute. Given the tax advantage of
donating shares, in my mind, it doesn’t make sense to donate any other way if you have stock
holdings."
If you would like to make a charitable donation in-kind to the Art Gallery of Hamilton, you may
contact either Ed Walzak or Victoria Watson of the Walzak Watson Wealth Management Group of
RBC Dominion Securities Inc., Hamilton Branch. Ed can be reached at 905-546-5858 or Victoria
at 905-546-5690.
AGH President and CEO Louise Dompierre is also available to speak to you about
donations to the Gallery; she can be reached at 905-527-6610, ext. 228.
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