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Flow-Through & Charity Flow-Through Shares Explained

Axiom Group recently rolled out the red carpet to welcome the experts from WCPD Inc. (Wealth Creation Preservation Donation) to its Axion U training centre. The main agenda? To unravel the intricacies of Flow-Through and Charity Flow-Through Shares, two groundbreaking investment tools redefining the realms of finance and philanthropy in Canada.

Flow-Through Shares: The Basics

At the heart of this strategy lie the Flow-Through Shares. These shares allow corporations, especially in sectors like mining, to transfer or “flow-through” their exploration and development expenses to investors. The investors can then claim these expenses as deductions, offering a lucrative tax incentive. The allure of these shares is rooted in their capacity to provide significant tax breaks, particularly useful for sectors with high upfront costs and extended timelines to profitability.

Charity Flow-Through Shares: An Evolution

Charity Flow-Through Shares expands on this concept. After purchasing the Flow-Through shares, investors sell them to designated back-end buyers, incurring a capital gain. This is where the charitable angle comes into play. A portion of these shares, or their sale proceeds, is donated to a chosen charity. The charity, in turn, issues tax receipts to the donor. This transaction provides a charitable donation and offsets the capital gains tax from the share sale, enhancing the tax benefits.

The Combination Deal

A standout feature of this method is the “Combination Deal.” Buying a larger quantity of Charity Flow-Through Shares, a segment is allocated to a foundation, yielding tax receipts. The remaining shares are then sold for a profit. This system significantly reduces the net donation cost, making charitable giving more financially attractive.

Win-Win for Donors and Charities

Donors experience the dual advantage of aiding their chosen cause while also availing tax benefits, potentially even profiting from their donation. Charities, on the other hand, can anticipate an uptick in contributions as this method gains traction.

While potent, the Charity Flow-Through Shares strategy remains an under-tapped avenue in Canada. Axiom Group would like to thank WCPD Inc. for shedding light on this transformative strategy. 

To find out more, contact our presenter:

WCPD Inc. and Foundation WCPD