Is flow-through shares good?
Ideally you made a ton of money on the shares, but even if you don’t make money on the shares, flow throughs can be a very good investment because of the tax credit. These work really well for people who are in the top tax bracket.
How long do you have to hold flow-through shares?
2 years
Holding period – Flow-through shares have a holding period of up to 2 years. You can’t get your money out during this period, no matter how the company is doing or what you need the money for.
How risky are flow-through shares?
Are there risks? Once you purchase the flow-through shares and have taken the CEE deduction, you are relying on the company to spend the money correctly. If the total sum of the investment is not spent on exploration within the 24 months, you may be retroactively denied the CEE deduction.
How does flow-through shares work?
Flow-through shares invest in small start-up resource companies without enough profits to write off their expenses, but those companies are allowed to pass their expenses off to shareholders who can deduct them from their income.
Can corporations buy flow-through shares?
Yes, corporations have the same advantages buying flow-through as does the individual investor.
What is CEE and CDE?
Canadian resource companies are permitted to fully deduct specific exploration and development expenses, known as Canadian Exploration Expense (CEE) and Canadian Development Expense (CDE).
Can companies buy flow-through shares?
What is Ontario flow-through share tax credit?
The Ontario Focused Flow-Through Share (OFFTS) Tax Credit is intended to stimulate mineral exploration in Ontario and to improve access to capital for small mining exploration companies.
How do I invest in flow-through shares?
The flow-through shares can be purchased directly from a resource company, or from a limited partnership (LP). The LP then invests in resource companies, which provides the investor some diversification.
What special rule applies to the ACB of flow-through shares?
It’s important to note that the adjusted cost base (ACB) of a flow- through share is deemed to be zero. This means that when you eventually sell your shares, the sale proceeds will be taxed as a capital gain.
How do I invest in flow through shares?
What is a flow through fund?
A Flow Through Fund is a non-‐permanent, non-‐endowed fund that is established by one or more principals in order to distribute all of a fund’s capital to one or more qualified donees that are specified from time to time by the donor, within a fixed time period.
What is a flow through share?
Flow-through share. A FTS is a type of share issued by a corporation to a taxpayer, pursuant to an agreement with the corporation under which the issuing corporation agrees to incur eligible exploration expenses in an amount up to the consideration paid by the taxpayer for the shares.
What are the changes to the flow-through share issuers in Canada?
On July 10, 2020, the Government of Canada announced changes to protect jobs and safe operations of junior mining exploration and other flow-through share issuers, by extending the timelines for spending the capital they raise via flow-through shares by 12 months.
What does CRA do to monitor flow-through shares?
The Canada Revenue Agency (CRA) reviews all FTS arrangements. Audits are carried out to monitor the program. List of definitions related to flow-through shares. Login error when trying to access an account (e.g.
What is a FTS share?
A FTS is a type of share issued by a corporation to a taxpayer, pursuant to an agreement with the corporation under which the issuing corporation agrees to incur eligible exploration expenses in an amount up to the consideration paid by the taxpayer for the shares.