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.
5-922675 XXXXXXXXXX
Dear Sir:
RE: Technical Interpretation - Donations of Trust Fund to Charities
This is in reply to your letter dated September 4, 1992, wherein you request a technical interpretation on section 118.1 of the Income Tax Act (the "Act") in a particular fact situation.
The situation that you describe in your letter appears to be a real situation which would come under the jurisdiction of our district offices. However, we are prepared to offer the following general comments which may not be appropriate in a given fact situation.
From the limited facts outlined in your letter, and assuming that no person other than X has a capital interest in the property before X's death, it seems that from a legal stand point the beneficial ownership of the property remained in X's hands and will remain as such until her death. Therefore, under subparagraph 54(c)(v) of the Act, no disposition of the property occurred when X contributed the property to the trust prior to 1971.
Although our view could differ after a review of all the documents involved, we are of the opinion that the transfer of X's capital interest in a portion of the trust corpus to the charitable organizations specified in her will, will constitute legacies to these organizations. Consequently, our view is that X will be allowed a tax credit under subsections 118.1(1) and 118.1(5) of the Act in the calculation of her tax payable for her last taxation year in respect of the legacies made to the charitable organizations provided all the conditions prescribed in the Act for the deductibility of such a tax credit are met.
The preceding comments are based on the Act and the Regulations as of the date hereof without taking into account any future amendments thereto, whether currently proposed or not.
We trust that these comments will be of assistance to you.
Yours truly,
for Director Manufacturing Industries, Partnerships and Trusts DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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