Principal Issues: Can the donation of marketable securities to a registered charity be characterized as enduring property? If so, would the charity be prevented from disposing of the marketable securities and maintaining the substitute property as enduring property?
Position: Marketable securities will qualify as enduring property. Provided the donor has given permission, the charity is not prevented from disposing of the securities and maintaining the proceeds as the enduring property.
Reasons: Enduring property is defined in subsection 149.1(1) of the ITA and includes a gift received subject to a trust or direction that it be held by the charity for a term of not less than 10 years. Property includes either cash or a gift-in-kind. Therefore, a gift of marketable securities, subject to the donor's written direction that they be held by the charity for 10 years, qualifies as enduring property.
The definition of enduring property includes "...the property given or property substituted for the gift..." Provided the donor has given the charity permission to dispose of the securities within the 10-year period, property later substituted for the original gift is considered part of the enduring gift.