Ken Stern

Here's a great introduction to a tax strategy reserved exclusively for Canadian Accredited Investors. It's never too late in the year to find #taxrelief. With thanks to Brian Crombie and his team and to MarkBorkowski for his support. #save tax #philanthropy #flowthroughshares #canadianmining https://lnkd.in/gSQ8VJwE

Capital Gains Tax changes June 2024 As of June 25, 2024, Canada has introduced new rules regarding the capital gains inclusion rate. Here’s what you need to know: Inclusion Rate Increase: The capital gains inclusion rate has been increased from 50% to 75%. This means that if you realize a capital gain, 75% of that gain will now be subject to tax, up from the previous 50%. $250,000 Exclusion for Individuals: For individual taxpayers, there is a new exclusion on capital gains. The first $250,000 of capital gains realized in a calendar year will be excluded from the increased inclusion rate. Gains beyond this amount will be subject to the new 75% inclusion rate. This aims to provide some relief to small investors and homeowners. Corporate Capital Gains: All capital gains realized by corporations, including Canadian-Controlled Private Corporations (CCPCs), will be subject to the new 75% inclusion rate without any exclusions. This change is significant for businesses, as it increases the taxable portion of their investment gains. Capital Dividend Account (CDA): For CCPC owners, the increased inclusion rate affects the amount they can withdraw from the Capital Dividend Account. The CDA allows shareholders to withdraw tax-free amounts that represent the non-taxable portion of capital gains. With the inclusion rate rising to 75%, the non-taxable portion decreases, reducing the amount that can be withdrawn tax-free. Impact on Investments: Investors need to reassess their portfolios and consider tax-efficient strategies. Tax-loss harvesting, where losses offset gains, will become more valuable to mitigate the higher tax burden. Tax Planning: Proactive tax planning is essential. Canadians should engage with financial advisors to navigate these changes and optimize their tax situation. These changes aim to increase government revenue and address income inequality but also require more strategic financial planning for individuals and businesses alike.

Is there really hope that the government might carve out the mining sector from the new CGIR?

Many #charities benefit from larger donations enhanced via flow-through shares. With the #Canadian government's focus on developing #criticalminerals an exemption will support mining exploration across the country. #flowthroughshares #tax #tax2024 #paylesstax https://lnkd.in/g2BZzWY5

Canada's Quest for Green Energy It seems counter intuitive for the Canadian Government to thwart its stated desire to support exploration for #criticalminerals with their enhanced #taxcredit while at the same time hampering mining companies ability to raise capital because they have increased the Capital Gains Inclusion Rate #CGIR and the new more punitive Alternative Minimum Tax #AMT rules. https://lnkd.in/grw9ZXDg

Canada's Quest for Green Energy It seems counter intuitive for the Canadian Government to thwart its stated desire to support exploration for #criticalminerals with their enhanced #taxcredit while at the same time hampering mining companies ability to raise capital because they have increased the Capital Gains Inclusion Rate #CGIR and the new more punitive Alternative Minimum Tax #AMT rules. https://lnkd.in/grw9ZXDg

Canada's Quest for Green Energy It seems counter intuitive for the Canadian Government to thwart its stated desire to support exploration for #criticalminerals with their enhanced #taxcredit while at the same time hampering mining companies ability to raise capital because they have increased the Capital Gains Inclusion Rate #CGIR and the new more punitive Alternative Minimum Tax #AMT rules. https://lnkd.in/grw9ZXDg

Flow Through shares can be a great tax planning tool and for philanthropists, can significantly reduce the cost of giving. Here's a great explanation of the financial benefits and the all important Mineral Exploration Tax Credit. * A flow-through share is a type of common share that permits the initial purchaser to claim a tax deduction equal to the amount invested. * The flow-through share regime allows public companies to transfer to investors certain exploration expenditures conducted on Canadian soil. * Flow-through share financing contributes over 65% of the funds raised on Canadian stock exchanges for exploration across the country, generating significant exploration activity within Canadian borders https://lnkd.in/grw9ZXDg

Has the world gone mad?

April 2024 Federal Budget Impact on Flow Through Share Structured Transactions   The Federal Budget made a significant change, substantially increasing the percentage of capital gains subject to tax. This takes effect June 25th, 2024. Any Flow-through shares bought before that date will be at the current 50% inclusion rate. To take advantage of current tax rules, the transaction must close by June 24th! In the coming days and weeks we expect tens of millions in corporate and personal flow-through share product coming down the pipeline. Consider reserving an allocation quickly as donor and investor demand is likely to be quite high between now and the June deadline.   Here are the basics: The Federal Budget surprised everyone in the flow-through mining and critical-mineral industry by increasing the capital gain inclusion rates from 50% to 66% as of June 25th. Flow-through shares have a zero adjusted cost base. Therefore, 100% of the proceeds of sale is a capital gain. By participating before June 25th, you save the extra 16% inclusion - a material benefit. There is no change to the inclusion rate for individuals if the total capital gain is below the $250k threshold. Over ~$350K of flows puts you in the higher capital gain inclusion rate of 66%. We can calculate a blended rate benefit for large buyers.    After June 25th, corporate flow purchases will probably no longer be beneficial. But we do have corporate product coming soon and will close well before the June 25th deadline.   The key is to get in touch and get on the client waiting list.   * New 2024 Alternate Minimum Tax (AMT) calculations will replace the old AMT immediately. For personal flow buyers, this will mean the maximum you can purchase is approximately a third less than the maximum in past years. We can estimate what your current maximum would be. AMT does not apply to corporations, hence there is an opportunity to decrease corporate tax to zero.    Together, with our industry partners at the Mining Association of Canada (MAC), the Prospectors & Developers Association of Canada (PDAC), and many others, our team has started engaging with government to demonstrate how this increase to the capital gains inclusion rate will have a devastating impact on our country’s Critical Mineral Strategy and charitable flow donations. There is no guarantee that we can persuade Finance to make changes. But we are trying.   Our flow-through structure with immediate liquidity accounts for approximately 85% of all critical mineral junior mining exploration in Canada. The Canadian government has publicly stated many times that there is no path to zero carbon without critical minerals. Finance may not be aware of the damage to charity critical mineral structured flows their capital gain increase will have, and we will be lobbying officials to reconsider this as it applies to mining and exploration in Canada.