Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
PRINCIPAL ISSUE:
Whether gifts of paintings to specific charities named in the deceased taxpayer’s will, could be claimed in the deceased income tax return where the trustee has the discretion to decide which painting should be given to each named charity.
Position TAKEN:
Yes.
REASON FOR POSITION TAKEN:
In order for 118.1(5) to apply the terms of the will must expressly state that a specific gift is made to the registered charity. This requirement is met where the only discretion of the trustee is the allocation of which painting will be given to each named charity.
XXXXXXXXXX 5-983025
L. J. Roy, CGA
Attention: XXXXXXXXXX
April 26, 1999
Dear Sir:
Re: Gifts by will
This is in reply to your letter of November 18, 1998, wherein you requested our opinion on an hypothetical situation.
The situation described in your letter appears to relate to an actual fact situation. Written confirmation of the tax implications inherent in particular proposed transactions are given by this Directorate only where the transactions are outlined in an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R3 dated December 30, 1996. Questions concerning actual fact situations should otherwise be directed to your tax services office. Although, we cannot provide a specific answer or a ruling with regard to your query, we offer the following general comments which are not binding on the Department.
Subsection 118.1(5) of Income Tax Act (the "Act") can only apply where an individual by the individual's will makes a gift to a qualified donee in subsection 118.1(1) of the Act. This would be the case where a specific gift is made to a qualified donee expressly in and by the terms of the will itself without any discretion by trustees (i.e., the qualified donee on reading the will can expect that a specific gift will be made to it).
Where a will provides that specified property will be gifted to named qualified donees and that the trustee will only have the discretionary power to decide which specified property will be given to each named donee, it is our view that such discretionary powers would not preclude subsection 118.1(5) of the Act from applying.
The foregoing opinions are not rulings and in accordance with the guidelines set out in IC 70-6R3 they are not binding on Revenue Canada.
We trust the above comments will be of assistance to you.
Manager
Financing and Plans Section
Financial Industries Division
Income Tax Rulings
and Interpretations Directorate
Policy and Legislative Branch
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