Sightline in the Financial Post: Tax-Saving Investments to Help Build a Stronger Portfolio

Are you still paying a high marginal tax rate? Fortunately, there is an investment vehicle that can help you reduce taxes and build a stronger portfolio: flow-through shares. Flow-through shares are common shares in a resource company that grant shareholders the option to deduct 100 percent of the cost of the shares from their taxable income. To help you learn more about this often-under-utilized tax-saving resource, The Financial Post recently spoke with Sightline Wealth Management for insight.

“Flow-through shares offer possibilities for minimizing taxes, even beyond the basic [Canadian exploration expenses (CCE)] deduction, especially for investors who are being taxed at the highest marginal rates,” says Sightline Senior Investment Advisor Paul de Sousa.

However, while the entire cost of a flow-through share is tax deductible in the year it is purchased, it is important to note that any profits from the disposition of those shares do become taxable as capital gains. “If I buy $10,000 worth of flow-through shares, the cost base is counted as zero, as though I paid nothing for it,” explains de Sousa. “So, there are capital gains incurred when you sell those shares at any price.”

When considering incorporating flow-through shares in your retirement portfolio, de Sousa tells the publication that it might be a good idea to work with an experienced investment advisor to ensure you select the right flow-through limited partnership that can grant you the best possible results.

“We can direct investors to specific flow-through limited partnerships,” he says. “These vehicles aim to mitigate the risk of investing in resource flow-through shares by working to assemble a professionally managed, well-diversified portfolio of junior resource companies operating in that space.”

Click here to read the entire Financial Post article.

Important Information:  

Sightline Wealth Management LP (“Sightline”) is not a tax advisor. Please consult your respective accountant for more information.

Sightline Wealth Management LP (“Sightline”) is an investment dealer and is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF). Sightline provides management and investment advisory services to high-net-worth individuals and institutional investors.

Sightline Wealth Management LP is a wholly owned subsidiary of Ninepoint Financial Group Inc.

(“NFG Inc.”). NFG Inc. is also the parent company of Ninepoint Partners LP, it is an investment fund manager and advisor and exempt market dealer. By virtue of the same parent company, Sightline is affiliated with Ninepoint Partners LP. Information and/or materials contained herein is for information purposes only and does not constitute an offer to sell or solicitation to purchase securities of any issuer or any portfolio managed by Sightline Wealth Management or Ninepoint Partners, including Ninepoint managed funds.

 Sightline Wealth Management (“Sightline”) makes every effort to ensure that the information has been derived from sources believed to be reliable and accurate. However, Sightline assumes no responsibility for any losses or damages, whether direct or indirect, which arise out of the use of this information. Sightline is not under any obligation to update or keep current the information contained herein. The information should not be regarded by recipients as a substitute for the exercise of their own judgment. Past performance is not indicative of future performance. Please speak to your Advisor regarding the suitability of information provided in this article for you. The opinions, estimates, projections and/or recommendations contained in this document are those of the author as of the date hereof.

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