Securities and Mutual Funds


You are no longer subject to capital gains tax when you donate publicly traded securities to qualified charities. You are also still entitled to receive a charitable tax receipt for the fair market value of the securities donated. As a result, donating securities to United Way Oakville may produce a greater tax benefit than selling the shares first, and then donating the cash. The following exchangeable shares are eligible:

  • Shares, rights, bonds or debentures listed on a designated stock exchange
  • Shares of a Canadian public mutual fund corporation
  • Units of a widely held Canadian mutual fund trust
  • An interest in a segregated (insurance) fund trust
  • A bond or debenture issued or guaranteed by the Government of Canada or one of the provinces

Benefits to you:

  • Tax Advantages — By donating your appreciated securities or mutual funds directly to United Way Oakville you can eliminate your capital gains tax bill.
  • Reduced Brokerage Fees — Many brokerage houses forego fees for charitable transactions.
  • Simple and Convenient — Securities are easy to transfer. Your broker transfers the shares from your account to United Way Oakville’s brokerage account.
  • Opportunity — An opportunity to make a greater difference in your own community.
  • Recognition — Your gift can be honoured during your lifetime.

How does it work?

The securities must be transferred to United Way Oakville and not be sold by the donor. The gift will not qualify for the reduced capital gains tax if the securities are sold and the cash then gifted. A charitable tax receipt is issued for the fair market value of the security on the date of transfer. Here is a simplified example to illustrate the benefits. The first option involves selling the shares and then giving the cash to United Way Oakville. In the second option, you transfer the shares directly to United Way Oakville.

An example of the tax benefit of donating shares to United Way Oakville*

Option 1

Sell shares and donate cash

Option 2 Donate shares directly

Fare Market Value of Security (a)

$100,000

$100,000

Cost base of Security

$50,000

$50,000

Capital Gain

$50,000

$50,000

Taxable Capital Gain 50%

$25,000

$50

Capital Gains Tax Due (b) 46%

$11,500

$0

Donation Tax Credit (c) 46%

$46,000

$46,000

Total Cost Donation (a) + (b) + (c)

$65,000

$54,000

Savings of Donating Securities vs. Cash

$11,500

* Assumes a marginal income rate of approximately 46% (varies by province).

Please seek expert advice

If you are thinking about transferring assets that have appreciated in value, please seek expert advice from a tax specialist or your broker to ensure that your financial goals are considered, your tax situation reviewed, and that your gift is tailored to your circumstances. If you would like to know more about making a gift to United Way Oakville, please call Aideen Hennessy, Director of Finance and Administration at 905-845-5571 ext. 226 or aideen@uwoakville.org.

Click here to download the Transfer Form.

Click here to download the Guidelines to Transferring Assets to United Way Oakville.

Click here for a sample letter to your broker.