The entire cost of flow-through shares is tax-deductible in the year they are purchased by the Investor.
- Reduce Taxes Payable: In addition, the proceeds from the disposition of those shares are taxable as capital gains at a lower tax rate, instead of as ‘income’ which is taxed at a higher rate.
- Tax Deferral: It is often advantageous to pay taxes in the future rather than today. Investor’s purchasing a flow-through share limited partnership do not pay taxes until they have a deemed disposition on their shares.
- Tax Efficiency: Investing in flow-through shares allows the Investor to effectively convert income into capital gains, which is taxed at a lower tax rate. This also allows the investors to take advantage of any capital loss carry-forwards.
Investors may access the flow-through market by either purchasing shares directly from a Mineral Issuer or by investing in a flow-through limited partnership. Flow-through limited partnerships are investment vehicles that add three important benefits to the tax advantages of flow-through investing:
✓ Experienced and Professional management,
✓ Access to a targeted approach with potential capital appreciation,
✓ Diversification through a portfolio approach.
The investment objectives are to provide limited partners with a tax assisted investment in flow-through shares with a view to maximizing the tax benefit and achieving capital appreciation for limited partners.