Incentives for Charitable Giving in the 2006 Federal Budget

The 2006 Federal budget, released on May 2, provides an incentive that is good news for donors and charities. Canadians who donate publicly listed securities as a gift to charity will no longer pay the capital gains tax on their appreciated asset. This complete capital gains relief comes after years of an inclusion rate for gifts of publicly listed securities that was set at 25 per cent. The news is expected to give a significant boost to the charitable sector and encourage giving. This exemption is effective immediately. It is important to note that the donation must be an "in kind" transfer, not the cash proceeds of sale of the security.

RRSP/RRIF designations

Thanks to a 2002 federal budget, donors can now make charitable gifts by naming the charity as a beneficiary of an insurance policy, RRSP or RRIF. No longer must the donor pass these assets through their estates when they gift them to a charity to be eligible to receive the tax receipt in the year of death.

Information adapted from the Alzheimer Society of Canada