25 Adelaide Street East, Suite 1710

Toronto, ON, M5C 3A1

BORDERLESS INVESTING®

25 Adelaide Street East, Suite 1710

Toronto, ON, M5C 3A1

Flow Through Investments

Advantages of Flow-Through Limited Partnerships

  • Potential for Capital Appreciation: Flow-through LPs primarily invest in growth-oriented oil & gas and mining exploration, production and development companies.
  • Reduce Current Taxable Income: CEE flow-through LPs may be structured such that the amount invested is 100% tax deductible against any source of income in the year the investment is made (except in Quebec). Additional deductions may also be available in subsequent years.
  • Preferential Tax Treatment of Capital Gains: Tax deductions shelter income and reduce the adjusted cost base of the investment to nil. As a result, proceeds realized on disposition are taxed as capital gains.
  • Tax Deferral: Taxable income in the year of investment is effectively converted to capital gains tax in the year of the disposition.
  • Take Advantage of Capital Losses: Realized capital losses and/or net capital loss carry-forwards can be used to offset capital gains realized. l Diversification: Flow-through limited partnerships may offer exposure to several public and private issuers of flow-through shares.
  • Professional Investment Management: Flow-through limited partnerships are actively managed by professional portfolio managers.

Who can benefit from Flow-Through Limited Partnerships

  • High-Income Earners: High-income earners who are taxable at the highest marginal tax rate.
  • Investors Taxable at Lower Rates in the Future: Flow-through limited partnerships can be used to defer taxes to periods when an investor will be taxed at a lower tax rate.
  • Recipients of Large Lump Sums of Taxable Income: A recipient of a large lump sum of taxable income can use flow-through limited partnerships to shelter the payment from taxes.
  • Investors With Capital Losses: Investors with capital losses and/or net capital loss carry-forwards can offset capital gains realized on disposition of flow-through limited partnership units.
  • Investors Who Plan to Make a Charitable Donation: Investors can maximize tax savings by donating the mutual fund units from the rollover event to qualified charitable organizations.
  • Investors Saving for Retirement: Investors can use flow-through limited partnerships to augment their retirement savings while obtaining tax benefits similar to those provided by RRSPs.
  • High-Income Seniors: High-income seniors can use flow-through limited partnerships to reduce taxable income to maximize OAS benefits.
  • Corporations: Corporations, including personal holding companies, can also take advantage of many of the benefits offered by flowthrough limited partnerships.
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