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 donations to the XXXXXXXXXX (the "Trust Fund") in its capacity as agent of the Crown in right of XXXXXXXXXX qualify as gifts to her Majesty in right of Canada or a province for purposes of paragraphs 110.1(1)(b) and 118.1(1) of the Act?
Position TAKEN:
Yes. Gifts made by a donor to the Trust Fund in its capacity as agent of her Majesty in right of XXXXXXXXXX will qualify for a deduction under paragraphs 110.1(1)(b) and 118.1(1) of the Act.
Reasons FOR POSITION TAKEN:
ATR-63 (under the heading "Law and Analysis") states that an entity can be considered an agent of the Crown in right of a province where an Act which established the entity expressly declares that the entity is an agent of the Crown. This position is also published in paragraph 7 of IT-297R2. In the present case, the XXXXXXXXXX (hereinafter the "Bill") which provides for the establishment of the Trust Fund further provides that the Trust Fund is an agent of the government of the Province of XXXXXXXXXX for all purposes. Moreover, previous favourable rulings have been issued in similar cases (see for example, please see #3-941275, #3-933246 and #3-931488).
XXXXXXXXXX
XXXXXXXXXX 981740
XXXXXXXXXX
Attention: XXXXXXXXXX
XXXXXXXXXX, 1998
Sir/Madam,
Re: Advance Income Tax Ruling - XXXXXXXXXX
This is in reply to your letter dated XXXXXXXXXX, wherein you requested an advance income tax ruling on behalf of the above-noted taxpayer. We also acknowledge the information provided in subsequent correspondence and during our various telephone conversations in connection with your request (XXXXXXXXXX).
We understand that to the best of your knowledge and that of the taxpayers involved:
i) none of the issues involved in the requested ruling is being considered by any District Tax Services Office or Taxation Centre of the Department in connection with a tax return already filed, and
ii) none of the issues involved in the requested ruling is the subject of any notice of objection or is under appeal.
Unless otherwise stated, all references to a statute are to the Income Tax Act R.S.C. 1985 (5th Supp.), c.1, as amended, (the "Act") and all terms and conditions used herein that are defined in the Act have the meaning given in such definition unless otherwise indicated.
Our understanding of the facts and proposed transactions is as follows:
FACTS
1. The Government of the Province of XXXXXXXXXX has introduced the XXXXXXXXXX (hereinafter the "Bill") in the provincial legislature.
2. The purpose of the Bill, as set out in the explanatory note to the Bill, is to provide the XXXXXXXXXX (which area is more fully described in the Schedule to the Bill) with its own Act and to establish a statutory trust to support XXXXXXXXXX.
3.
XXXXXXXXXX
4.
XXXXXXXXXX
5. The Trust Fund is deemed, pursuant to XXXXXXXXXX of the Bill, to be an agent of the government of the Province of XXXXXXXXXX for all purposes.
6. The XXXXXXXXXX (hereinafter the "Trustee") is, pursuant to XXXXXXXXXX of the Bill, the trustee of the Trust Fund.
7. In carrying out the purposes of the Trust Fund the Trustee is, pursuant to XXXXXXXXXX) of the Bill, an agent of the government of the Province of XXXXXXXXXX.
8. The purposes of the Trust Fund, as set out in XXXXXXXXXX of the Bill, are as follows:
a) XXXXXXXXXX
b) XXXXXXXXXX
The Trust Fund's address is as follows:
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
PROPOSED TRANSACTIONS
Once the Bill has been given Royal Assent by the XXXXXXXXXX Legislature the Trust Fund may, pursuant to XXXXXXXXXX of the Bill, accept gifts which must, pursuant to XXXXXXXXXX of the Bill, be deposited to the accounts of the Trust Fund.
PURPOSE OF PROPOSED TRANSACTIONS
To provide for the funding of activities related to the XXXXXXXXXX.
RULINGS
Provided the above descriptions of facts, proposed transaction and purposes of the proposed transaction are accurate and constitute complete disclosure of all the relevant facts and proposed transaction and the purpose thereof, and provided further that the proposed transaction is carried out as set out herein and that the XXXXXXXXXX Act is enacted substantially as described in the Bill, we confirm that:
A. Gifts made by a corporate donor to the Trust Fund in its capacity as agent of Her Majesty in right of XXXXXXXXXX will be included in the corporation's charitable gifts as defined in paragraph 110.1(1)(a) and as such will be deductible to the extent that the other provisions of section 110.1 are met.
B. Gifts made by an individual donor to the Trust Fund in its capacity as agent of Her Majesty in right of XXXXXXXXXX will be included in the individual's "total charitable gifts" as that term is defined in subsection 118.1(1) and as such will be deductible to the extent that the other provisions of section 118.1 are met.
The above rulings are based on the Act in its present form and do not take into account any proposed amendments thereto.
The above rulings are given subject to the general limitations and qualifications set forth in Information Circular 70-6R3 issued on December 30, 1996 and is binding on Revenue Canada Customs, Excise and Taxation provided that the proposed transactions are completed before XXXXXXXXXX.
Except as expressly stated herein, nothing in this ruling should be construed as implying that Revenue Canada Customs, Excise and Taxation has accepted, approved or confirmed any income tax implications in connection with the facts or proposed transactions referred to herein.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
4
.../cont'd
.../cont'd
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