Donation of shares

A donated share is a non-cash gift. If the donated share is listed on a designated stock exchange (one that is publicly traded), a charity can issue an official donation receipt for the fair market value of the gift on the date it was donated. If the share is not listed on a designated stock exchange, the deemed fair market value rules may apply.  

Date of donation

The date a share is donated is the date the transfer of ownership takes place.

It is the general view of the Canada Revenue Agency that a charity has taken ownership of a share when it has:

• the right to receive dividends from the share

• the right to receive amounts on the liquidation of the corporation

• the right to exercise the votes attached to the share

A charity may refuse to accept a gift for various reasons. For example, it might refuse to accept shares in a company whose business conflicts with the charity’s values. On the other hand, accepting a gift implies that the charity understands the nature of the gift and does not intend to return it. We recommend that donors contact the charity before donating shares.

Most shares are transferred electronically. As a general rule, the date of a donation of electronically transferred shares is the date the shares were received in the charity’s account or its broker’s account. In such cases:

• the donor has informed the charity it intends to make a donation of shares

• the charity has agreed to accept the donation by giving the donor its account number

• the transfer of the shares and all rights attached to them has taken place

However, the charity should review each situation to confirm the date of the donation. If it cannot confirm the date, the charity should get legal advice. 

Gifts by will

For a donation made from the estate of an individual who died after December 31, 2015, the estate is considered to have made the donation at the time the property is transferred to a charity. The fair market value of the donation is the value at the time the charity receives the property. For transfers of eligible property within the first 36 months after the individual’s death, the estate can either allocate the donation to the tax year of the estate in which the donation is made, to a previous tax year of the estate, or to the last or next-to-last tax year of the individual who died. For more information on donations made from the estate of an individual who died after 2015, go to Estate Donations - Deaths after 2015.

For a donation from the estate of an individual who died in 2015 or earlier, the donation is considered to have been made by the individual immediately before death. In this case, the fair market value of the donation is the value immediately before death and not when the charity receives the property.

Value of shares

A charity must review each situation to figure out the fair market value. As a general rule, for shares listed on a designated stock exchange (one that is publicly traded), the Canada Revenue Agency accepts the closing bid price of the share on the date it is received as the fair market value of the shares. It can also accept the midpoint between the high and the low trading prices for the day if that is a better indicator of fair market value on normal and active market trading. A charity may wish to get professional advice to determine the value of shares that are not publicly traded. 

Related links

• CG-012, Non-qualifying security