25 February 1998 External T.I. 9730365 - GIFTS BY WILL

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:

Gift by will for purposes of subsection 118.1(5) of residue of estate to be divided among such registered charities as trustees in their discretion consider appropriate.

Position:

Not a gift by will.

Reasons:

The name of the charity and the amount of the gift should be clearly stated in the will. In some circumstances the residue of the estate could be accepted as a specified amount if a named charity was to receive a specified portion, say 50%, and another named charity was to receive the other 50%. In the absence of the charities being named, subsection 118.1(5) will not apply.

5-973036
XXXXXXXXXX A.M. Brake

Attention: XXXXXXXXXX

February 25, 1998

Dear Sirs:

Re: Gifts By Will, Subsection 118.1(5)

This is in reply to your letter of November 14, 1997 wherein you asked the question set out below relating to the application of subsections 118.1(4) and (5) of the Income Tax Act (the "Act").

YOUR QUESTION

If a deceased's will specifies that the residue of his or her estate is to be divided among such registered charities as the trustees in their discretion consider appropriate, will these gifts be considered to be made by will, in accordance with subsection 118.1(5) of the Act?

OUR COMMENTS

Subsection 118.1(5) of the Act applies where an individual by his or her will makes a gift to a qualified donee described in 118.1(1) of the Act. Generally, a specific gift must be made to a qualified donee expressly in and by the terms of the will itself, without any discretion by trustees, i.e., the qualified donee on reading the terms of the will can expect that a specific gift (a specific bequest or a specific device) will be made to it. In the absence of each qualified donee being named in the will along with the amount each such donee is to receive, it is our general view that the gift will not be considered to have been made by an individual in the individual's will.

We trust our comments will be of assistance to you.

Yours truly,

John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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