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29 April 2003 External T.I. 2002-0177065 F- CONFISCATION DE LA SOLDE-- summary under Subsection 5(1) Summary Under Tax Topics- Income Tax Act- Section 5- Subsection 5(1) salary that is forfeited by RCMP officer for misconduct nonetheless is includible as salary which was constructively received In finding that pay of an RCMP officer forfeited pursuant to s. 45.12(3) of the Royal Canadian Mounted Police Act for contravention of the Code of Conduct does not reduce the amount of salary included in the officer’s income, CCRA stated: Receipt of salary does not only include the actual receipt of amounts, but also includes the deemed receipt of amounts withheld from a person's salary. ...

CRA responded: [A] registered charity that returns gifted property could be regarded as making a gift to a non-qualified donee or providing an undue benefit, which are contraventions of the Act and could result in sanctions that include revocation of registered status. … [T]he determination of whether the gift of the life insurance policy to the foundation was subject to a condition subsequent or whether the foundation can legally return the life insurance policy is a question of law and beyond the scope of this technical interpretation. ...

CRA noted that generally gifted property becomes the absolute property of the donee, so that now returning a gift to the donor could result in the foundation being “regarded as making a gift to a non-qualified donee or providing an undue benefit, which are contraventions of the Act and could result in sanctions that include revocation of registered status.” ...