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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether cash donations from individuals or corporations to the XXXXXXXXXX will qualify as gifts to the Crown.
Position TAKEN:
Yes.
Reasons FOR POSITION TAKEN:
In accordance with paragraph 7 of IT-297R2 the Deputy Attorney General for the Province of Manitoba confirmed by letter his opinion that the XXXXXXXXXX is an agent of the Crown in the right of the Province of Manitoba at common law and by reasons of its enabling legislation.
L. Barrows
XXXXXXXXXX 951771
Attention: XXXXXXXXXX
November 22, 1995
Dear XXXXXXXXXX
Re: Tax Status of Donations to
XXXXXXXXXX
This is in reply to your letter of June 21, 1995 wherein you requested our opinion whether cash donations from individuals or corporations to the
XXXXXXXXXX
will be eligible for treatment as gifts to the Crown under the provisions of the Income Tax Act (the "Act").
Paragraph 7 of Interpretation Bulletin IT-297R2 states "Whether a particular entity is an agent of the Crown in the right of Canada or a province depends on whether the law creating the entity (a corporation, commission, gallery, etc.) expressly makes it an agent of the Crown or the entity is an agent of the Crown at common law". If the enabling legislation is unclear with respect to the status of an entity as an agent of Her Majesty in the right of a province, it is our policy to accept the opinion of the provincial Attorney General in this regard. You have provided a letter dated November 8, 1995 from Mr. Bruce A. MacFarlane, Q.C., Deputy Attorney General, Province of Manitoba confirming his opinion that the XXXXXXXXXX is an agent of the Crown in the right of the Province of Manitoba at common law and by reasons of its enabling legislation.
We advise that written confirmation of the tax implications inherent in a particular situation are given by this Directorate only where proposed transactions are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R2. However, in response to your request, we can provide the following general comments which are not binding on the Department.
In our view, gifts made by a donor which is a corporation to the XXXXXXXXXX in its capacity as agent of Her Majesty in the right of Manitoba will qualify for a deduction under paragraph 110.1(1)(b) of the Act subject to the restrictions of deductibility provided therein and provided official receipts containing prescribed information as required by subsection 110.1(2) of the Act are filed by donors and submitted with their tax returns.
In our view, gifts made by a donor who is an individual to the XXXXXXXXXX in its capacity as agent of Her Majesty in right of Manitoba will qualify for a tax credit calculated in the same manner provided in subsection 118.1(3) of the Act, on the basis that the gift is included in calculating the individual's "total Crown gifts" pursuant to the definition of that term in subsection 118.1(1) of the Act and provided that the individual files a receipt for the gift containing the prescribed information as required by subsection 118.1(2) of the Act.
It is also our view that a true gift is a voluntary transfer of real or personal property from a donor who must freely dispose of the property to a donee. The transaction may not result directly or indirectly in a right, privilege, material benefit or advantage to the donor or to a person designated by the donor. To qualify, the donation must be in the form of an outright gift. Any legal obligations on the donor would cause the transfer to lose its status as a gift. Further, in order for an expenditure to be considered a gift, it must be made without conditions, from detached and disinterested generosity, out of affection, respect, or charity, or like impulses, and not from constraining forces of any moral or legal duty. The donee must have an unfettered right to use a donation as they wish. However, it is the Department's view that donations subject to a general direction from the donor is acceptable, provided that no benefit accrues to the donor, the directed gift does not benefit any person not dealing at arm's length with the donor and decisions regarding utilization of the donation within a program rest with the donee.
We trust these comments will be of assistance to you.
Yours truly,
R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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