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.
Thank you for your letter of September 23, 1998, regarding your constituent’s concerns that Revenue Canada wants to change the clergyman’s residence deduction and restrict the kinds of donations that qualify for a charitable tax credit.
Revenue Canada does not have the authority to change the law. Revenue Canada’s role is to administer and enforce the Income Tax Act as passed by Parliament, and in accordance with relevant jurisprudence. The Department of Finance is responsible for writing and amending the Act.
Generally, to be eligible for the clergyman’s residence deduction under paragraph 8(1)(c) of the Act, an individual must be a member of the clergy, a member of a religious order, or a regular minister of a religious denomination. When one of these conditions is met, the individual must be in charge of, or ministering to, a diocese, parish or congregation, or engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination. The deduction provided for under paragraph 8(1)(c) corresponds to the value of the employment benefit included in the individual’s income, where the employer provides the individual’s residence. However, subject to certain limits, where the individual rents the residence, the clergyman’s residence deduction corresponds to the rent paid and, where the individual owns the residence, to the fair rental value of the residence.
While there has not been any recent amendment to paragraph 8(1)(c), there are significant differences between the Department’s views and those of members of various organizations regarding the interpretation and application of this deduction. However, these differences have been ongoing for a number of years. The Department’s views regarding the clergyman’s residence deduction are based on jurisprudence, the ordinary meaning of the terms used in paragraph 8(1)(c) and the intent of this provision. Many of the issues and interpretations which have been the subject of disagreement are presently before the Tax Court of Canada in a number of cases on the clergyman’s residence deduction.
The term “gift” is not defined in the Act and therefore assumes its common law meaning for purposes of the tax credit in respect of charitable gifts. Accordingly, in general terms, a gift is a voluntary transfer of property without valuable consideration. A gift is generally made if property, usually cash, is transferred by a donor to a registered charity, the transfer is voluntary, and the transfer is made without expectation of return (no benefit of any kind may be provided to the donor or to anyone designated by the donor, except where the benefit is of nominal value). There has been no change to this definition of a gift recently.
I appreciate the opportunity to address your constituent’s concerns.
Herb Dhaliwal, P.C., M.P.
C.C. Minister’s Office
October 22, 1998
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