Office Hours with George: Flow-through shares: Tax savings or tax trap?

Every year, Canadians invest in flow-through shares in pursuit of tax savings. Some investors do very well. Others discover that tax advantages and a good investment are not always the same thing. The reality is that flow-through shares might be a powerful planning tool in the right circumstances. For example, they are often considered by individuals who:

• Have experienced a large spike in income during the year
• Have sold a business, property, or investment and are facing a larger-than-normal tax liability
• Are drawing income from RRSPs or RRIFs, perhaps “melting” their registered plan, and looking to reduce the resulting tax bill
• Simply want to understand whether these tax-advantaged investments have a place in their overall strategy

But while the tax savings can be attractive, the risks and complexities are often overlooked.

That’s why I was excited to welcome Klint Rodgers, CEO and Co-Founder of Canvest Financial Inc. (contact details below), to help explain the benefits and risks of flow-through investments during Office Hours with George.

Klint is a dual-licensed advisor based in British Columbia, but registered in BC, Alberta, Saskatchewan, Ontario, and the Yukon. He is a national team lead for an Alberta-based exempt market dealership, and has been doing private market investments, public investments, precious metals, flow-throughs, and more for 16-plus years.