Ontario Focused Flow-Through Share Tax Credit
Learn how to claim a refundable tax credit if you own shares in a mining exploration company.
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About flow-through shares
A flow-through share is a type of investment. It takes place when you invest money in a corporation that agrees to spend your money on mining exploration in Ontario.
In exchange for your investment, you receive a share. This is a portion of ownership in that corporation. Once mining exploration happens, the corporation transfers its exploration expenses to you, the shareholder.
You can claim 5% of those expenses as a refundable tax credit on your personal income tax and benefit return.
You qualify for the credit if you lived in Ontario on the last day of the tax year you’re filing a return for and you purchased eligible flow-through shares:
- after October 17, 2000
- from a corporation that is permanently established in Ontario
Eligible mining exploration expenses must result from mining exploration activities required to determine the existence, location, extent or quality of a mineral resource in Ontario. This includes:
- environmental studies or community consultations
- geological, geophysical or geochemical surveys
- drilling by rotary, diamond, percussion or other methods
You can’t claim expenses for an existing mine, including potential or actual extensions of that mine.
How to apply
To get this credit, file your personal income tax and benefit return, even if you don’t have any income to report, along with:
- the Ontario Credits form (ON479)
- the Ontario Focused Flow-Through Share Resource Expenses (Individuals) form (T1221)
If you file a paper return
Attach the credit certification documents you received from the mining exploration company that had qualifying expenses in Ontario. Your certification documents should include either a:
If you file electronically
Keep all your documents in case the Canada Revenue Agency requests them at a later date.
You can claim the credit either alone or as a member of a partnership (a single business where two or more people share ownership).
Estates can claim the credit on a deceased person’s final return.
The amount of the credit is 5% of your share of the eligible Ontario exploration expenses incurred during the tax year.
The amount you receive depends on the:
- number of shares you purchased from a mining corporation
- cost per share
When is the credit paid
The credit is used to reduce the Ontario tax you pay. If your tax credit is more than the amount of tax you owe, the remainder will be paid to you as a tax refund after your return is assessed.
If you qualify for a refund, you’ll receive your money within six to eight weeks after you file your tax return.
You should contact the Canada Revenue Agency if you:
- did not receive a tax credit to which you believe you are entitled
- received less than expected
- are asked to repay a credit under an assessment or reassessment made by the federal government
You can make a formal objection to the Canada Revenue Agency by following the process set out in its Notice of Assessment or Reassessment.