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.
Revenue Canada Taxation Head Office
F. Francis (613)957-3498
April 25, 1988
XXXX
This is in reply to your letter of March 15, 1988, wherein you requested our views with respect to the tax status of the contributions made by taxpayers in the following situation:
- A Church minister is approaching retirement age
- Several members of the Church propose to subscribe to a "Retirement fund for ministers" provided that assurance is given that such contributions would be used to supplement the pension of the particular Church minister upon retirement.
We do not express opinions with respect to specific proposed transactions other than as a reply to a request for an advance income tax ruling. Nevertheless, we will offer the following general comments that may be of interest in your case.
As indicated in paragraph 3 of our Interpretation Bulletin IT-110R2 , a gift for purposes of paragraph 110(1)(a) of the Income Tax Act (the "Act") is a voluntary transfer of property without consideration or benefit of any kind accruing to the donor or to anyone designated by the donor. Donations for the benefit of particular individuals are gifts of private benevolence at law and there is no provision under the Act to permit the deduction of such gifts in computing a donor's taxable income.
Moreover, a registered charity may not act as intermediary in such a situation in order to provide the donor with a tax receipt to which the donor would not be entitled had the donation been made directly to the individual.
We have taken the position in paragraph 16(f) of our Interpretation Bulletin IT-110R2 that donations made to charities may be subject to a general direction provided that decisions regarding specific beneficiaries of one of its established programs are the exclusive responsibility of the charity.
It is therefore our view that the contributions by the members of the Church in the circumstances outlined above would not be considered as "gifts" for purposes of paragraph 110(1)(a) of the Act since assurance will be given as to the specific beneficiary of the funds.
We regret that our reply could not be favourable.
Yours truly,
for Director Financial Industries Division Rulings Directorate
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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