This tax credit is designed to assist small and medium-sized Nova Scotia businesses and co-operatives in obtaining equity financing by offering a personal income tax credit to individuals investing in registered labour-sponsored venture capital corporations (LSVCCs).
An LSVCC is:- A corporation that has been sponsored by a trade union for the purpose of assisting eligible businesses in creating and maintaining employment
- Raises venture capital by issuing shares to the public
- Capital raised is invested in eligible businesses through equity financing or, in certain cases, subordinate debt obligations
Details- Maximum annual tax credit amount is $2,000
- Investment may be made within the calendar year or within 60 days of taxation year end
- Not refundable and cannot be carried forward to future years
- Investor must have sufficient tax payable in the year or the credit will be lost
- Investors are required to hold the investment for at least 8 years
- If an investment is disposed of within the 8-year period the investor may be required to repay the tax credits earned
Eligible InvestorsAvailable to residents of Nova Scotia who are over 19 year of age and who have valid reasons for making the investment, other than simply obtaining the tax credit.
Disclaimer: Approval to issue shares under the program does not constitute a provincial government endorsement of the corporation or co-operative issuing the shares. The Province does not guarantee any investment. Investors assume all risk for their investments.
Eligible InvestmentsMust be newly issued common voting shares of the corporation that are non-redeemable, non-convertible and are not restricted in profit sharing or participation upon dissolution
The shares cannot be eligible for any other tax credit or deduction allowed under the Income Tax Act, except as a deduction for RRSP purposes or a federal LSVCC tax credit.