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.
Principal Issues: Determine the date on which the gift is made
Position: General comments provided.
Reasons: The gift cannot be completed before the condition precedent is satisfied and legal title to the gifted property is transferred to the donee.
XXXXXXXXXX 2003-004495
Luisa A. Majerus
February 9, 2004
Dear XXXXXXXXXX:
Re: Gift to Charity
This is in reply to your letter dated October 15, 2003 concerning the date of delivery of a gift to a registered charity.
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an Advance Income Tax Ruling request. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide the following comments.
As provided in Interpretation Bulletin IT-110R3 (Gifts and Official Donation Receipts) a gift is made if a donor transfers the gift to a registered charity; the transfer is voluntary; and the transfer is made without expectation of return. Pursuant to proposed amendments to the Act, where, under certain circumstances, the amount of the advantage, as defined in proposed subsection 248(31) of the Income Tax Act (the Act), is provided in respect of a transfer of property to a registered charity, the amount of the advantage will be used in the calculation of the eligible amount of the gift as defined in proposed subsection 248(30) of the Act. This draft legislation is discussed in CCRA Technical News No. 26 which may be found on the CCRA website at http://www.ccra-adrc.gc.ca/tax/technical/incometax/itnews3-e.html.
In addition, the essential requisites of a gift are: intention and capacity of the donor to make the gift, delivery to a qualified donee and acceptance of a gift by the donee. Where a donor and donee have signed a deed of gift the requisites of intention and acceptance may be fulfilled. However, where the gift is subject to a condition precedent, the gift cannot be completed before that condition is satisfied.
Furthermore, similar to a pledge, a deed is an undertaking to make a gift and an official tax receipt can only be issued once the gift is completed which requires that legal title to the gifted property be transferred to the donee.
We trust these comments will be helpful.
Yours truly,
F. Lee Workman
Manager
Financial Institutions Section
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2004
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2004