Give a Gift of Securities

Help Winnipeggers with a gift of listed securities

Canadian tax rules make it advantageous to gift certain publicly “listed securities” to charity, because tax laws effectively eliminate the tax on capital gains that arise when a person gifts listed securities—which are capital property that has appreciated in value—to a charity.

Gifts of the following securities benefit from these rules:

  • Shares, debt obligations, and rights listed on a designated stock exchange.
  • Shares of the capital stock of a Canadian public mutual fund corporation.
  • Units of widely held Canadian mutual fund trusts.
  • Interests in related segregated fund trusts.
  • Prescribed debt obligations.
  • Donation receipt for fair market value of the securities on the date transfer is received.
  • Transfers can be made at any time, including in your will.
  • Donor’s capital gains tax on the securities is eliminated.
  • Charity pays no tax on the sale of the securities.

Note that in order to eliminate the entire gain up to the date that the gift is made, the gift provided for in your will must be made by your “graduated rate estate” (or former graduated rate estate) and be completed no later than three (or five) years following death.

Illustrating tax benefits

For example, if a donor wishes to make a gift of $10,000 to United Way Winnipeg, the donor could make this gift in cash or by way of a gift of securities. The securities have appreciated in value from the donor’s original cost of $2,000 to their present value of $10,000. The chart below illustrates the tax benefits of donating the securities rather than cash.*

Donate Cash Donate Securities
Market Value $10,000 $10,000
Cost Base n/a $2,000
Capital Gain (Proceeds less cost) n/a $8,000
Tax Portion of Capital Gain n/a $0
Tax Portion of Capital Gain at 46% n/a $0
Capital Gain Tax Saving* n/a $1,840
Charitable Tax Credit at 46% $4,600 $4,600
Total Tax Savings* $4,600 $6,440
Net Cost of a $10,000 Gift $5,400 $3,560

*This example illustrates approximate amounts only and is based on a taxpayer resident in Manitoba, subject to tax at the top marginal rate applicable to income under $200,000, and the current tax rates. The actual tax credit will vary depending on your taxable income and your province of residence. Tax rates are subject to change. Capital gains tax saving is equivalent to the tax payable on the capital gain that would otherwise have been payable had the securities been liquidated by the donor. A higher marginal tax rate applies to income exceeding $200,000, and the federal tax credit has been increased to fully offset federal tax to the extent gifts are made from income over $200,000.

Make a gift of listed securities to United Way Winnipeg

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Return completed forms here.