MineralA flow-through share is a newly issued share covered by a written agreement under which a qualifying resource company incurs eligible expenses and renounces qualifying amounts to the subscriber. The structure can allow the subscriber to claim the renounced expenses for tax purposes. The agreement and expense eligibility matter; the label alone does not establish a tax benefit.
The CRA distinguishes the original subscriber from someone who later buys the shares. Its glossary also distinguishes the effective date of a renunciation from the date it is actually made. CRA flow-through share glossary.
| Record | What to establish |
|---|---|
| Subscription agreement | Issuer, subscriber, issue price, share count and promised expense treatment |
| Renunciation information | Amount, expense category and effective date |
| T101 statement | Amounts reported to the subscriber, including relevant adjustments |
| Financing disclosure | Gross proceeds, fees, securities issued and any attached warrants |
The CRA’s program instructions explain the T101 reporting process and adjustments. They also warn that assigning an identification number does not confirm that the shares, agreement or expenses qualify. CRA instructions for the flow-through share program.
Separate the financing from the tax outcome
For research, first record the actual issue price and number of shares. Then record the expense renunciation separately. A subscription payment is not the same thing as a tax saving, and gross financing proceeds are not net cash after fees.
Expense deductions and mineral exploration tax credits are separate parts of the regime, with their own conditions. Do not assume that every expense qualifies for every credit. CRA program definitions and eligibility instructions. This guide gives no personal tax estimate: confirm the relevant tax year, jurisdiction, agreement and circumstances with a qualified tax adviser.
Use the dilution calculator for new-share arithmetic and the warrant tool for disclosed warrant tranches. Neither calculator models tax treatment.