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ARTICLE · 06 FEBRUARY 2025

Tax Considerations When Donating Shares In Canada

Gowling WLG
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Canadian donors can gift publicly traded and privately held shares to qualified donees ("QD") that may be eligible for donation tax credits and other tax advantages.

CanadaTax
Gwenyth Stadig
Gwenyth Stadig
Natasha Barrett
Natasha Barrett
Upama Poudyal
Upama Poudyal
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Co-authored by Summer Law Students Abdullah Khalid and Amber LeBlanc

Canadian donors can gift publicly traded and privately held shares to qualified donees ("QD") that may be eligible for donation tax credits and other tax advantages. Subsection 149.1(1) of the Income Tax Act ("ITA") includes Canadian registered charities in its definition of QDs. The Canada Revenue Agency ("CRA") provides a list of QDs here.

The type of security donated can significantly impact tax treatment. For example, donating securities directly—rather than selling and donating the proceeds—may help donors mitigate potential capital gains tax, resulting in a greater overall tax benefit.

While it is possible for public and private corporation shares to be donated to QDs, gifting publicly traded shares is usually a more straightforward process, as gifts of privately held shares are subject to certain limiting criteria.

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