5 September 2024 External T.I. 2024-1022711E5 - Donations by a Spouse

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: 1. Whether the definition of “total charitable gifts” in subsection 118.1(1) of the Act permits a Donor's spouse or common-law partner to include a portion of the eligible amount of a gift made by the Donor prior to the time that the individuals became spouses or common-law partners, in calculating the spouse or common-law partner's donation tax credits during tax years that are within the five year carryforward period for charitable gifts, and after the time that the individuals became spouses or common-law partners. 2. Whether, in 2024, the Donor's spouse or common-law partner, can request to have her tax returns reassessed for the 2019 through 2022 tax years to reflect the unclaimed portion of the eligible amount of the Donor’s gift for purposes of claims for the donation tax credit.

Position: 1. Generally, yes. 2. Maybe.

Reasons: 1. The reference to "the individual's spouse or common-law partner" in the definition of total charitable gifts in subsection 118.1(1) refers to the relationship between the donor who made the gift and their spouse or common-law partner in the tax year in which the donation tax credit is being claimed. 2. The Minister may reassess the tax payable under Part I by a taxpayer within the normal reassessment period under subsection 152(4) and may, in limited circumstances, reassess beyond the normal reassessment period under subsection 152(4.2).

XXXXXXXXXX 								2024-102271
									Alison M. Campbell

September 5, 2024

Dear XXXXXXXXXX:

Re: Total charitable gifts made by a spouse or common-law partner

We are writing in response to your request dated May 19, 2024, wherein you requested our comments on the definition “total charitable gifts” of an individual in subsection 118.1(1) of the Income Tax Act (Act).

You describe an example in which an individual (the “Donor”) made a gift to a qualified donee in 2017, a tax year during which the Donor did not have a spouse or common-law partner. In the 2019 tax year, the Donor got married. The Donor claimed donation tax credits in respect of portions of the eligible amount of that gift in his tax returns for the 2017 through 2022 tax years. No other individual has claimed donation tax credits in respect of any portion of the eligible amount of the Donor’s 2017 charitable gift.

Following the end of the 2022 tax year there were unclaimed eligible amounts in respect of the gift that would no longer be available to the Donor for purposes of computing the Donor’s donation tax credit. The Donor’s spouse (Spouse), would like to amend her tax returns for the 2019 through 2022 tax years (inclusive), to include the unclaimed portion of the eligible amount of the gift made by the Donor in 2017 for purposes of computing the Spouse’s donation tax credit for those tax years.

You have asked whether the definition of “total charitable gifts” in subsection 118.1(1) of the Act permits the Spouse to include, for the 2019 to 2022 tax years, a portion of the eligible amount of the Donor’s gift made prior to the time the individuals became spouses.

You also asked whether the Spouse can request to have her tax returns reassessed for the 2019 through 2022 tax years to include the unclaimed eligible amount of the Donor’s gift for purposes of the donation tax credit.

Our Comments

This technical interpretation provides general comments about the provisions of the Act and related legislation. It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R12, Advance Income Tax Rulings and Technical Interpretations.

Donations made by an individual’s spouse or common-law partner

Subsection 118.1(3) of the Act provides for a discretionary non-refundable tax credit to an individual for a tax year computed by reference to the individual’s “total gifts” for the year. An individual’s “total gifts” for a tax year is defined in subsection 118.1(1) of the Act and refers to the individual’s “total charitable gifts”, “total cultural gifts” and “total ecological gifts” as these terms are defined in subsection 118.1(1) of the Act.

Subsection 118.1(1) of the Act generally defines an individual’s “total charitable gifts” for a particular tax year as the total of the eligible amount of the gifts made in the particular year or any of the five preceding tax years to qualified donees, by:

• the individual, or
• the individual’s spouse or common-law partner,

to the extent that the eligible amount is not otherwise included in determining an amount that is deducted under section 118.1 of the Act in computing any individual's tax payable for any of those prior tax years.

It is our general view that, for a particular tax year of individuals who are spouses or common-law partners, either spouse or common-law partner can include, in total charitable gifts, the eligible amount of charitable gifts made by either individual in the particular year or five previous tax years, even though the spousal/common-law relationship did not exist in one or more of those five previous tax years. Accordingly, in the described example, subject to the limits and other requirements described in section 118.1 of the Act, total charitable gifts of the Spouse for the 2019 to 2022 tax years can include a portion of the unclaimed eligible amount of the charitable gift made by the Donor.

For additional information regarding the donation tax credits for gifts made to qualified donees, please refer to Guide P113, Gifts and Income Tax.

Requesting a reassessment of a tax return for a prior tax year

Under subsection 152(4) of the Act, subject to certain exceptions, the Minister may not assess or reassess tax payable of a taxpayer under Part I for a tax year after the normal reassessment period. In the case of an individual, the normal reassessment period is defined in subsection 152(3.1) of the Act, to be the three-year period, from the date of the taxpayer’s original Notice of Assessment.

However, subsection 152(4.2) of the Act gives the Minister of National Revenue the discretionary authority to make a reassessment or a redetermination beyond the normal reassessment period in respect of a tax year, when requested by an individual or a graduated-rate estate, in order to determine a refund or to reduce tax payable. The request must be made in writing on or before the day that is 10 calendar years after the end of the tax year. Generally, an individual can make a written request in respect of a tax year, within this 10-year time limit, if the individual was not aware of, or missed claiming a deduction or a credit that was available for that year.

The CRA has published guidance on the taxpayer relief provisions (including subsections 152(4) and (4.2)) in Information Circular IC 07-1R1, Taxpayer Relief Provisions. Please refer to the Information Circular for more information on requesting a reassessment and a refund of an overpayment of taxes.

We trust our comments will be of assistance.

Yours truly,

Bob Naufal
Manager
Financial Institutions Section
For Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch