CRA declines to give guidance on whether designating a charity as a contingent policyholder generates a charitable credit

An individual provides in his will for a gift of a life insurance policy to a charity, which is then made promptly after his death by his estate. CRA indicated that a charitable credit could be claimed in his terminal return.

CRA was then asked about a variant of this under which the charity is currently designated as contingent policyholder, so that on his death there will be an automatic transfer of the policy to it. CRA declined to give any comfort on this alternative, stating whether and when this constituted a gift was a “private law matter.”

Neal Armstrong. Summary of 6 October 2017 APFF Financial Strategies and Instruments Roundtable, Q.9 under s.148(7) and s. 118.1 – total charitable gift – (c)(i)(A) and (c)(i)(C).