Disclaimer: This is intended to provide information respecting the New Brunswick Labour Sponsored Venture Capital Tax Credit under the New Brunswick Income Tax Act (the Act). This should not be regarded as a replacement of the laws, regulations or administrative documents to which it refers.
The New Brunswick Labour Sponsored Venture
Capital Tax Credit
The New Brunswick Labour-Sponsored Venture Capital (LSVC) Tax Credit is a personal non-refundable income tax credit provided for purchases of approved shares in prescribed LSVC corporations. The credit is non-refundable which means it can only be used to reduce provincial income tax owing. New Brunswick taxpayers who purchase approved shares of prescribed NB LSVC corporations on or prior to March 17, 2009 are eligible for a 15% non-refundable tax credit up to a maximum credit value of $750 per year. Effective for shares purchased after March 17, 2009 the New Brunswick Labour-Sponsored Venture Capital Tax Credit is enhanced to allow for an increase in the qualifying investment from $5,000 to $10,000, and the tax credit rate is increased from 15% to 20%. These shares must be held for 8 years otherwise the tax credit amount must be re-paid.
The federal government offers a similar 15% non-refundable personal income tax credit up to a maximum of $750 per year for federally approved LSVC corporations.
For purposes of the NB tax credit, eligible LSVC corporations are required to be prescribed in the New Brunswick Regulation 2001-11 under the New Brunswick Income Tax Act.
Please note: LSVC shares may be eligible for RRSP deductions.