Most don’t understand charitable tax benefits

One-in-five Canadians with a written will (22%) plan to leave some of their estate to charity, finds a Scotiabank poll.

But only four-in-ten are aware of the tax benefits associated with charitable donations. Residents of Alberta (47%) are the most aware of the tax benefits, while those in Quebec (27%) are the least aware.

Read: Most don’t know how investments are taxed

“With only 39% of Canadians aware of the tax benefits associated with gifts by will to charity, many may not know that Canada has the most generous tax benefits in the world for gifts by will,” says Malcolm Burrows, head of Philanthropic Advisory Services at Scotia Private Client Group. “While taxes are not the primary reason to give, tax savings greatly reduce the cost to other beneficiaries.”

He adds, “A gift by will generates a non-refundable tax credit that can be claimed against tax owing, and new rules provide a five-year claim period against up to 100% of net income.”

Read: Wealthy to leave 30% of estates to children

Additional findings include:

• The top three reasons to leave some of their estate to charity are to give back to society (60%); not having dependents and wanting money to go to a good cause (20%); and the tax benefits (12%).
• For Canadians who don’t plan to give, the top reasons include preferring to leave money to beneficiaries (64%); affordability (22%); and giving to philanthropic causes during their lifetime (20%).
• Canadians aged 18-34 are most likely to leave some of their estate to charity.
• Men (71%) are more likely leave money to their loved ones, compared to 58% of women.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.