How to give stock as a gift
Learn how to give the gift of stocks to a loved one with our three-step guide.
Looking for a unique and thoughtful gift idea for someone important in your life? Why not give them the gift of stocks? Stocks can encourage a lifelong interest in investing, while their value can also increase over time—and help to create an extra source of income through dividends.
Keep reading to find out how to gift a stock in Canada and the tax implications you need to be aware of.
How to gift a stock: Step-by-step guide
Step 1. Choose a trading platform
Both you and the person receiving the stock will need a brokerage account. If you both have accounts with the same broker, this makes the transfer process smoother and can sometimes help you save on transfer fees.
If you already own the stock you want to gift, you’ll already have a brokerage account. If not, you’ll need to choose a trading platform and create an account.
When deciding on a brokerage account, look at factors like trading commissions, the stock exchanges you can access, and how easy the platform is to use. You’ll also need to research the process for transferring stocks, and the fee the broker charges for stock transfers.
Learn more in our guide to online stock trading in Canada.
Trading platforms where you can buy stock in Canada
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Step 2. Buy the stock (if you don’t already own it)
Here’s the fun part — choosing a stock to buy for your recipient. You could choose a company your loved one likes or uses often, or choose based on your knowledge of the market.
Here are a few types of stocks to consider:
- Dividend stocks. Household names — known as blue-chip companies— like Agnico Eagle Mines, Rogers and the big 5 banks tend to be safe options and they pay dividends. They provide the potential for long-term growth as well as passive income from dividends, but they’re less likely to see significant capital growth.
- Growth stocks. These are new or obscure stocks with the potential to grow significantly. Although growth stocks are riskier, picking the right one could offer bigger profit in the long run compared to a safe blue-chip stock.
- Global stocks. Many Canadian brokerages now let you trade on US stock exchanges, providing access to some of the world’s largest companies. Some brokers also provide access to markets all over the world, allowing you to invest in Europe, Asia and a range of emerging markets.
- Exchange-traded funds (ETFs). If you’re looking for a more diversified long-term investment, an ETF holds a collection of multiple stocks and is usually less volatile. By investing in an ETF that tracks a stock index like the TSX 60 or the S&P 500, you can gift your loved one a diversified portfolio of investments.
- Favourite company. New and young investors might get hooked on investments with a stock from a familiar name, like Apple, Netflix or Disney.
How much does it cost to buy stock?
The first factor you need to consider is the broker’s trading commission. Some brokers offer commission-free stock trading, but others charge a fee whenever you place a buy order. This could be a flat fee or it could be charged per stock you purchase.
Most of the largest Canadian companies by market capitalization have stock prices somewhere between $20 and $300. If a company has a high stock price that’s above your gifting budget, you might consider buying fractional shares—but you unfortunately can’t transfer fractional shares between brokers.
Step 3. Transfer the stock
The process to transfer stocks varies depending on the account the stock is held in and the recipient’s account.
The easiest transfer happens when the giver and receiver have accounts at the same brokerage firm. The giver fills out a form that includes the recipient’s brokerage account details and personal information. The transfer usually takes a few minutes.
Transfers to a different brokerage account can take a few business days, similar to a bank transfer.
If you purchased the stock directly from the company or it’s an older, paper stock — bought before online stock trading technology — contact the company’s stock transfer agent to find out how to perform the change of ownership.
Stock gifting platforms
Another option for gifting stock is to use a platform like GiveAShare or Unique Stock Gifts. These US sites allow you to buy one share of a stock and then gift it to a loved one. The stock is purchased at market value in the recipient’s name, and the platform delivers a physical stock certificate that you can get framed before giving it as a gift.
GiveAShare and Unique Stock Gifts allow you to invest in a range of major companies listed on US stock exchanges. Maybe the sports fan in your life would like Man United or Atlanta Braves stock. Maybe you’re buying for a coffee lover who would love to own Starbucks stock. Or perhaps your little princess would like to own Disney stock.
It’s easy to buy and gift stock on these platforms with a Canadian credit card. Just be aware that you’ll pay more than if you were to simply buy a stock through a brokerage, especially if you add extras like a frame, an engraving and other trimmings. You’ll also need to consider foreign transaction fees and currency conversion costs.
What are the advantages of giving stock as a gift?
- Long-term value. Many gifts lose value over time, but that’s not necessarily the case with stocks. Choose the stock you give wisely and it could increase in value over the long-term—one day in the future, your loved one may be able to sell the $100 gift you gave them for $500 or more. And if you give the gift of a dividend stock, it can also provide them with passive income.
- Buy something they’re passionate about. You can choose the stock you gift based on the recipient’s passions and interests. A keen gamer might like Nintendo or Sony shares, a tech guru might want Apple stock, or a sports fan might want Man United stock.
- Unique gift. Buying the right gift for a loved one can often be a guessing game. Gifting stock is more thoughtful and practical than buying clothes they may never wear or a gadget they may never use.
- Educational and inspiring. Gifting stock can also help teach younger generations about the benefits of investing, and inspire them to start investing their own money for a more secure financial future.
- Support a worthy charity. You can also support a worthwhile cause by transferring stocks to a registered charity. More on how this works a little further down the page.
What are the disadvantages of giving stock as a gift?
- Capital gains tax implications. When you gift stock, you’ll need to consider the capital gains tax obligations. Keep reading for a more detailed breakdown of how you’re taxed when gifting stocks in the next section.
- Difficult for children to understand. If you’re giving a gift to a younger child, they probably won’t find receiving stock as exciting as getting a $20 note in their birthday card or unwrapping a physical gift. It’ll be up to you to explain exactly what your gift means and why it’s worth getting excited about.
- You’ll need to choose wisely. If you’re buying for a child and the stock you gift them tanks, you could make them skeptical about the benefits of investing. Make sure you do plenty of research before choosing an investment.
How do taxes work on stock given as a gift?
The good news is that the CRA does not tax gifts. If you give stock to family or a friend, they do not have to pay any tax on it.
The bad news is that you, the giver, may be subject to capital gains tax. The CRA will treat your gift as you having disposed of your shares for their fair market value (FMV). Your capital gain is the difference between the price of the stock when you bought it and its value when you gift it.
This is something you’ll need to report when you file your taxes. And unless you’re a day trader, you’ll pay tax on 50% of the value of any capital gains.
Example: Capital gains tax when gifting stock
Kevin owns 5 RBC shares that he wants to give as a gift to his 21-year-old grandson. When he first acquired the shares in 2020, RBC was valued at $100, so he paid $500 in total. But when he gifts them in 2025, the RBC share price has risen to $205, so his 5 stocks are now worth $1,025.
This means Kevin has a capital gain of $525 ($1,025 – $500). But as capital gains tax only applies to 50% of this amount, Kevin will pay tax on 50% of $525, which is $262.50.
Dive deeper: How stocks are taxed in Canada
Gifting stock to children
Stocks can be thoughtful gifts for kids to get them interested in finance and could give them a financial leg up into adulthood.
Children under the age of 18 (or 19 in some provinces) can’t legally buy or own stock. However, a parent or guardian can open an informal trust, also known as an in-trust-for account, registered under an adult’s name until the child is old enough to have it on their own. When the child turns the age of majority, you can transfer ownership solely to them. Learn more in our guide to investing for teens.
Another alternative is to invest on behalf of a child in a Registered Education Savings Plan (RESP). You can use an RESP to hold a wide range of investments including stocks, while the investment income won’t be taxed until it’s withdrawn. You can also take advantage of matching contributions from the Federal Government to help grow your balance faster.
Donating stock to charity
If you feel the need to do a good deed, you can also donate stock to a registered charity. You can gift your stock to a “qualified donee”, a list of which can be found on the Government of Canada website.
Many charities offer information on their websites about the process you need to follow to donate stocks. And feelgood factor aside, donating also has tax benefits. An inclusion rate of zero applies to any capital gain that results from donating your stocks, so unlike when you gift them to another person, you won’t have to pay capital gains tax.
Bottom line
Gifting stock is a lot easier than many people realize. Stock is also a unique and thoughtful gift that could potentially increase in value over time. Follow the step-by-step guide above to find out how to gift stock, but just make sure you’re aware of your tax obligations before giving your gift.
Frequently asked questions about how to give stock as a gift
Sources
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