Ontario residents may qualify for an Ontario tax credit of up to 15 per cent of the cost of their investments in Labour Sponsored Investment Funds (LSIFs).
LSIFs provide capital to small and medium-sized Ontario businesses. LSIFs offer investment opportunities and tax credits to individual investors who purchase Class A shares of an LSIF.
Recent changes
The 15 per cent tax credit for investors will be phased out by the end of the 2011 taxation year.
The phase-out will occur as follows:
- The current 15 percent tax credit will remain until the end of the 2009 tax year.
- The tax credit will be lowered to 10 per cent for the 2010 tax year and to 5 per cent for the 2011 tax year.
The tax credit ends after the 2011 tax year.
The maximum investment that qualifies for the tax credit was increased from $5,000 to $7,500. This change is effective January 1, 2007.
For more information, please read:
- March 23, 2006 Information Bulletin
- September 30, 2005 News Release
- August 29, 2005 News Release and Backgrounder.
What are the benefits of the LSIF program?
The LSIF program provides benefits such as a tax credit for investors and potential returns on LSIF investments.
Investors may qualify for additional tax credits if they invest in an LSIF that qualifies as a Research Oriented Investment Fund.
Eligibility requirements
Specific criteria must be met by the:
- registered LSIF
- the corporation's employee organizations and shareholders
- investee businesses
- investments the corporation makes in investee businesses.
Please refer to the Labour Sponsored Investment Fund Guide for further information on eligibility requirements.
