Markou – Tax Court of Canada indicates that donative intent no longer is required for split gifts

The Ontario and Quebec appellants had engaged in the same leveraged donation program as to which the Federal Court of Appeal in Maréchaux had confirmed that none of the donations (even the cash portion) qualified as a “gift” for charitable credit purposes. In the Markou case, Paris J found that “donative intent in civil law, as in common law, is always an essential element of a gift, even a partial gift,” whereas here “there was just one interconnected transaction and no part of it can be considered a gift that was given in expectation of no return.”

One of the taxpayers’ arguments was that consent judgments had been issued, respecting donations made after the subsequent introduction of the split-gifting rule in s. 248(30), that accorded a credit for the cash portion of donations made under a leveraged donation program. In rejecting the proposition that this entailed an implicit recognition that there was “donative intent” for such cash components, Paris J stated:

[I]t appears that where the 80% threshold [in s. 248(30)] is not crossed, the lack of donative intent is no longer a bar to allowing charitable donation tax credits for transfers to qualified donees.

Neal Armstrong. Summaries of Markou v. The Queen, 2018 TCC 66 under s. 118.1(1) – total charitable gift and s. 248(30).