Canadians have very few tax breaks left. Investing in “flow through” shares offers significant tax savings to help out our energy and mining industries with a charity kicker. This is a rare win, win, win opportunity.
Tag: Shareholder Agreement
Here’s how it works. Let say a high income earning Canadian invests $100,000 in flow-through shares today. The issuing company uses the funds for exploration, but cannot use the associated tax deductions, so renounces them, or flows them through to investors; hence, the name flow-through shares. The investor then deducts 100% of his/her cost against income for tax purposes, resulting in about $46,000 in tax savings. Lower taxes also mean reduced tax installments for the following year.