Conditional

Summary Policy

Date
September 3, 2003 (Revised November 23, 2005)

Reference number
CSP-G04

Key words

Gift (conditional)

Policy statement

There are two types of conditions that can be attached to a gift: a condition precedent, and a condition subsequent.

A condition precedent is one that must be met before the gift takes effect (for example, a gift of $100,000 provided that the registered charity is able to raise an equal amount of money within a stated period of time). Since a condition precedent is not a gift at law until after the condition is fulfilled, a charity should only issue an official donation receipt after the condition has been met.

A condition subsequent is one that operates to defeat a gift that has already been made (for example, a gift made to a registered charity on the condition that the funds be used to operate a particular shelter for the homeless). If a condition subsequent fails and the gift reverts back to the donor, the charity should advise the Canada Revenue Agency that the original gift is being returned to the donor. A condition subsequent may result in a subsequent tax liability.

References

• Summary Policy CSP-G01, Gift

Date modified:

2005-11-28