Tax Benefits of Giving

Giving Costs Less than You Think

Did you know that the combined federal and BC tax credits for charitable donations above $200 reduce the cost of the gift by 43.7% or more?

The federal and provincial governments provide generous tax incentives to encourage people to support charities like The University of British Columbia, but most donors grossly underestimate the full value of these savings. This is partly because federal and provincial tax credits are calculated separately and not shown as one total amount on your tax return.

 

Tax benefits of estate gifts

Estate tax considerations

Planned gifts are essential to the university, providing important support for students and researchers. These gifts can also provide meaningful tax relief for you. Although there is no estate tax in Canada, when a person dies, there is a deemed disposition of their property and all capital gains are taxed at this time.

The full value of all RRSPs and RRIFs at your time of passing is included as income on the final tax return, unless the beneficiary is a spouse or financially dependent child or grandchild. This can generate a large tax bill for your estate or loved ones.

 

Tax benefits of estate giving

Your estate will receive a charitable tax receipt for the full value of your gift. This reduces the amount of tax payable. Indeed, your estate can claim gifts equal to 100% of net income in the year of passing, in the preceding year, and in any of the five subsequent years when taxes are owed by the estate.

Donating publicly traded securities through a will is a particularly beneficial strategy for receiving tax benefits. Simply select which securities to gift or give your executor authority to satisfy a bequest with a direct gift of securities. Your estate receives a tax receipt for the appreciated value of the gift—and the 50% tax on capital gains is waived.

You may name UBC as a direct beneficiary of a Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF). The total amount of the RRSP or RRIF (or a designated portion) will go to the university and, because it passes outside of your estate, is not subject to probate fees. In addition, your estate receives a tax receipt for the full amount of the gift.

 

We would be pleased to provide you with an illustration showing the tax benefits of a charitable estate gift customised to your particular circumstances.