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.
CANADIAN CULTURAL PROPERTY EXPORT REVIEW BOARD
Background
The Cultural Property Export and Import Act ("CPEIA)") contains provisions to encourage the retention of national treasures ("Canadian Cultural Property") within Canada. Taxpayers are encouraged to dispose of such property to institutions or public authorities in Canada which are designated under the CPEIA.
To benefit from these measures for tax purposes, a taxpayer who intends to dispose of a Canadian Cultural Property must obtain from the Canadian Cultural Property Review Board (the "Board") a certificate establishing that the property meets all of the criteria set out in paragraphs 29(3)(b) and (c) of the CPEIA.
In addition, subsection 118.1(10) of the Income Tax Act (the "Act"), which applies to gifts made after February 20, 1990 by an individual or a corporation, provides that the Board shall determine the fair market value of objects which are Canadian Cultural Property for the purposes of the rules relating to the tax treatment of gifts of such property to designated cultural institutions.
Both individual and corporate taxpayers who have made gifts in the year, or in certain circumstances in the five immediately preceding taxation years, are entitled to a tax credit or deduction under the provisions of section 118.1 or 110.1 of the Act. Gifts of Canadian Cultural Property to designated institutions are not subject to the 20% of the taxpayer's income limit. The value of an individual's gifts are converted to a tax credit, as determined by formula, for the purposes of calculating tax payable, while corporate taxpayer's obtain a deduction in computing taxable income. Any capital gains realized on the disposition of Canadian Cultural Properties to designated cultural institutions are exempt from income tax by virtue of subparagraph 39(1)(a)(i.1) of the Act. However, capital losses are deductible within the normal limits.
Bill C-93 is a Pending Amendment to subsection 118.1(10) of the Act deeming the fair market value of the object to be the fair market value determined by the Board. It also creates new subsection 118.1(11) allowing for assessments related to certificates issued or appeals under the CPEIA.
Bill Kerr
952911
957-2139
November 3, 1995
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