Ads keep this website free for you. does not research or endorse any product or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Flow-through Shares
Canadian Tax and
Financial Information Home

What's New

Links & Resources

Site Map

Need an accounting, tax or financial advisor? Look in our Directory.  Use above search box to easily find your topic!   Stay Connected with!
What's New
Personal Tax
Sales Taxes
Financial Freedom
Financial Planning
Registered Accounts
Real Estate
US Tax Tips
British Columbia
Atlantic Provinces
Federal Budget
Prov/Terr Budgets
Statistics etc.
Site Map
Advertise With Us
Contact Us/About Us
Links & Resources
Stocks, Bonds etc.  ->  Investing Tax Issues -> Flow-through shares

Tax Treatment of Income From Investments in Flow-Through Shares (FTSs)

Income Tax Act s. 66(12.6)-(12.75), 66.3(3)

This information is regarding investments which are held outside of RRSPs or other registered accounts.

Flow-through shares are considered to be a speculative investment.  Before purchasing, make sure you are aware of how long you will have to hold them before you can sell (usually 2 years), amounts of sales commission, etc.  The flow-through shares can be purchased directly from a resource company, or from a limited partnership (LP).  The LP then invests in resource companies, which provides the investor some diversification.

When investors purchase shares or units of flow-through shares or flow-through LPs, they are generally able to deduct the entire cost of these shares against their taxable income over a period of 2 or more years.  Eligible Canadian Exploration Expenses (CEE) and Canadian Development Expenses (CDE) are flowed through, or renounced, by the corporation to investors each year, and the investors can deduct these expenses from income.  The shares in the flow-through entity are usually converted on a tax-deferred basis to mutual funds after two years.  When these mutual funds are sold, generally the entire amount is taxed as a capital gain, because of the zero ACB, as indicated by CRA's Reporting Your Investments for flow-through shares.

Investors in flow-through shares may also benefit from investment tax credits provided by the federal government and some provincial governments.  

Investors who invest in flow-through shares directly with a principal-business corporation (PBC) will receive a Form T101, Statement of Resource Expenses

Investors who invest in flow-through shares through a partnership or limited partnership will receive a T5013 tax slip to be used in filing their tax return.  If the amounts on the T5013 are not in Cdn$, the currency used will be shown in box 205 of the T5013, and the amounts will have to be converted to Cdn$.

Canada Revenue Agency (CRA) Resources

Flow-through shares (FTSs)

How the flow-through share program works

Line 41200 (line 412 prior to 2019) - Investment tax credit

T5013-INST Statement of partnership income - Instructions for Recipient

T101 Statement of Resource Expenses

Tax Tip:  Base your investment decision for flow-through shares on quality of investment as well as tax advantages.

Revised: October 26, 2023



Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved.  See Reproduction of information from

Facebook  | Twitter  |  See What’s New, stay connected with by RSS or Email
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage. 
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.