Leaving Gifts of Registered Securities
to Trinity
Trinity can be named as a beneficiary of one or more of your Registered Retirement Savings Plans (RRSP), Registered Retirement Income Fund (RRIF), Life Income Fund (LIF), or Tax-Free Savings Account (TFSA).
By designating Trinity as the beneficiary of your plan(s), the amount qualifies as a charitable donation and for a donation tax credit. Whereas the fund value will still be regarded as income to the decedent person; in effect, Trinity will receive the full amount designated [say $100 ] and the donation tax credit will produce a tax saving to the donor of about one half [ say $50 ] as an offset.
Benefits of Gifting Registered Securities
Control – The registered investment remains available for your use throughout your lifetime, and you may allocate it to a particular program at Trinity or to the area identified as having the greatest need.
Simplicity - Ask your financial institution to change the beneficiary designation to the full legal name and address of Trinity Presbyterian Church York Mills, 2737 Bayview Ave, Toronto, ON, M2L 1C5
Flexibility – The designation can be changed if your financial circumstances change.
Cost Effective – There are no extra out‐of‐pocket costs.
Avoids Probate, Legal, and Executor Fees – Where the proceeds are payable directly to a beneficiary, the gift is not subject to probate or any other fees. The full amount is paid after death.
Not Included in Your Estate – A registered gift does not need to be addressed in your will, which is a public record, allowing for anonymity.
Satisfaction – Your gift creates a lasting legacy for you and will benefit Trinity well into the future.
Donating
Publicly Traded Securities
to Trinity
Historically, donations to charities have been in the form of cash (cheque, e-transfer or credit card). However, as people discover the benefits of donating publicly traded securities (stocks, bonds or mutual funds), these in-kind gifts are gaining prominence as a tax effective way to donate versus cash gifts.
When you sell publicly traded securities privately, you are taxed on 50% of the capital gains. However, if you donate the securities directly to Trinity, through the Presbyterian Church in Canada, as a gift-in-kind, you pay no tax on the appreciated portion and receive a donation tax receipt for their full market value, on the day of the sale. This means that donating securities — shares, bonds, or mutual funds — which have appreciated in value is a much more tax-efficient way to give than selling the securities and donating the cash.
Tax Benefits of Donating Securities (Example):
Sell shares / Donate Cash Donate Securities as gift-in-kind
Donation To Trinity $50,000 $50,000
Cost of Shares (10,000) ($10,000)
Capital Gain $40,000 $40,000
Taxable Capital Gain $20,000 $0 (0%)
Marginal Tax Rate (example) 40% 40%
Tax Payable $8,000 $0
Process for transferring securities to the Presbyterian Church in Canada (PCC)
The PCC will receive gifts of securities for Trinity. At your direction, your broker will electronically transfer your securities to the PCC’s brokerage firm. The PCC’s broker then sells the securities very soon after receiving the transfer. Based on the fair market value of the stock on the day it was sold, the PCC issues you the charitable tax receipt. The PCC allocates the net proceeds from the sale to the specified program or ministry at Trinity, as requested.