I accidentally found a new tax shelter in Canada. "Flow-through Share".
Simply put, you put a certain amount of money in flow-through share, usually through a fund, starting from $5000. 100% amount of that money, will be deducted from your income. The flow-through share is usually issued by resource companies listed in stock exchange. The fund acquired the shares with some premium. You can sell the share usually after 2 years. When you sell the share, your income, for example, $5500, will be your capital gain and you are subject to tax on your capital gain.
It defers your tax by two years and reduces it for 50%, as the capital gain is taxed on 50% only. Your risk is the price of the flow-through share dropped. Given the current market, I strongly believe the resource industry will keep growing in the next two years. Even if the share price doesn't change, you saved tax on half of your investment.
I'm definitely interested in the flow-through shares. It is said the CMP LP is the best flow-through share investment tool.
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