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THE ALBERTA INVESTOR TAX CREDIT (AITC) PROVIDES A 30% TAX CREDIT TO ELIGIBLE ALBERTA INVESTORS IN APPROVED VENTURE CAPITAL CORPORATIONS.

Individual investors will receive a refundable tax credit of 30% of every dollar invested up to an annual total investment of $200,000 per year ($60,000 in refundable tax credits). For example, on a $100,000 investment individuals will receive $30,000 back on their next tax return. Tax credits received for amounts in excess of a $200,000 investment will be carried forward for up to four years, subject to a maximum investment of $1,000,000.

Corporate investors will receive a non-refundable tax credit of 30%.  There are no limits to the amount invested.  However, non-refundable credits require Alberta taxes payable to be utilized against.  Individual tax situations vary and we recommend discussing with your tax advisor.

The AITC is available to Alberta investors who provide venture capital to Alberta businesses substantially engaged in:

 

Proprietary Technology

Research, development & commercialization of products & processes

Tourism

Recreation & Resorts / Skiing & Amusement / Hunting & Fishing / Sightseeing

Digital Media

Development of digital media / Game products

Excluded

Traditional agriculture / farming, mining, oil & gas, financial services

Example tax benefit

Individual
(Cash or existing RRSP)
Individual
(New RRSP Contribution)
Alberta
Corporation
Investment in ICM VCC
$200,000
$200,000
$200,000
Tax refund from new RRSP contribution (48%)
$ -
$96,000
$ -
30% Alberta Investor Tax Credit (AITC)
$60,000
$60,000
$60,000
Total tax credits
$60,000
$156,000
$60,000
Percent of capital at risk
70%
22%
70%

- Examples assume an Alberta investor in the highest tax bracket (combined provincial and federal rate of 48%)
- Alberta residents have a maximum refundable tax credit of $60,000 per year (a $200,000 investment). In aggregate residents may be eligible for credits on a total investment of $1,000,000 at any time (anything in excess of $200,000 carried forward for subsequent years)
- Alberta corporations are eligible for a non-refundable tax credit against Alberta taxes payable. Credits may be carried forward if not usable in the current year. Corporations do not have a limit on their investment
- Everyone’s tax situation is different. Be sure to consult your tax advisor

For more information:


Diversified portfolios benefit from a Venture Capital allocation

Opportunity to capture alpha & low correlation to conventional public equities

  • Near-to-zero correlation to large public equity and fixed income (-0.06 and -0.13, respectively)2

  • Among the 6,800+ active private equity investors surveyed by Preqin, 68% actively invest in Venture Capital

  • Sophisticated endowment funds such as Yale Endowment have steadily increased their allocation to venture capital and now allocate 19% of their total $29.4 billion endowment in 20183

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Yale Endowment Asset Classes

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1. Preqin Investor Outlook: Alternative Assets H1 2018 (page 26)
2. Invesco: The case for venture capital (page 2)
3. 2018 The Yale Endowment (page 9)