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: What constitutes a "set" under subsection 46(3).
Position: Question of fact
Reasons: See below
2013 STEP CANADA ROUNDTABLE, June 11&12, 2013
QUESTION 8. Listed Personal Property
Personal use property, including listed personal property, is deemed to have a cost of $1,000 per item, unless the items constitute a set, in which case the $1,000 minimum cost is to be allocated across the set.
In certain cases, it is easy to understand what is meant by a set. For example, one would speak of a set of dishes or cutlery, as constituting a set. However, in other cases, it is not clear as to what constitutes a set. Accordingly, we would ask clarification in the following hypothetical circumstances:
The taxpayer has a series of paintings produced by the same artist, which were sold as a "set," but would not have any particular value as a set, and have an equal value independently.
A person has a stamp collection consisting of a multitude of different stamps from different countries.
One can think of other examples which might constitute or not constitute a set.
Can CRA please provide some guidance here?
CRA Response
The term "set" is not defined in the Act and therefore carries its ordinary meaning in the context in which it is used. The CRA considers that a set for these purposes is a number of properties belonging together and relating to each other. For example, in the case of the hobby of philately, in the past, the CRA considered that a set is a number of stamps which were produced and issued by one country simultaneously or over a short period of time. The fact that the value of a number of properties, if sold together, exceeds the aggregate of their values, if sold individually, may indicate the existence of a set. However, this is not in itself a decisive factor.
Regarding your question concerning what is a "set" insofar as paintings are concerned; it is our opinion that simply because they were painted by one artist would not in and by itself, mean that they are a set. Nor would all landscapes, waterscapes, figures, etc. necessarily be a "set." The criterion in the case of paintings would seem to be whether or not a group of paintings were painted as a set and would ordinarily be disposed of as a set. For instance, a painter might be commissioned to paint, as a set, all former premiers of a province or a family tree. These would ordinarily be inserted in identical frames. These facts would seem to conclusively establish that such a group of paintings were indeed a "set" for purposes of the Act.
The determination of whether a set exists is therefore a question of fact, and we have not been provided with sufficient information on the paintings and stamps, in order to establish whether they form part of a set or not.
2013-048100
Katie Robinson
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