We have provided two letters recently released by the Canada Revenue Agency.
We have provided two letters recently released by the Canada Revenue Agency.
Canada has a mechanism to recognize certain foreign universities for purposes of donations. It is probably the most generous tax incentive system of any country in the world. Essentially if you are a degree granting university outside of Canada and you have 2 Canadian students generally studying at your university/college then you can apply to get on a list maintained by the Canada Revenue Agency. Once you are on the list you are considered to be a "qualified donee". That means you can issue Canadian official donation receipts under the Income Tax Act (Canada). WIth such status a Canadian who donates to your prescibed foreign university obtains the same benefits - of between 40 - 70% as if they had donated to a Canadian university.
Kate Robertson and Mark Blumberg recently prepared Part 2 of the article series, Guidance for Professional Athletes considering Philanthropy in Canada. This article provides suggestions and tips for professional athletes (and their trusted advisors) with respect to estabishing and operating a successful Canadian registered charity.
Kate Robertson and Mark Blumberg recently prepared an article, "Some thoughts on Professional Athletes and Philanthropy in Canada: Part 1" which provides helpful information and guidance for professional athletes and their trusted advisors who are exploring philanthropic options in Canada. Part 2 of this article series will provide suggestions and tips for professional athletes on operating a successful Canadian registered charity.
CRA recently released its first video as part of a new educational video series on 'Gifting and Receipting'. This series is meant to educate the public, donors, and those involved in the charitable sector on the type of donations that are tax-receiptable and the different CRA rules regarding receipting.
As a result of the 2016 Quebec Budget, Canadian registered charities are no longer required to complete a separate charitable registration in Quebec in order to be able to issue tax receipts to donors in Quebec.
Here is a recent article written by Mark Blumberg, Kate Robertson and Lynn Gluckman of Blumberg Segal LLP on the Top Fallacies about private foundations in Canada. The article discusses incorrect misconceptions that many people have about private foundations. This article was also published as a two-part series by the Hillborn Charity eNews on April 19th, 2016 and April 26, 2016.
The Hillborn Charity eNews just published the first part of our article Top fallacies about private foundations in Canada. It discusses numerous incorrect preconceptions that people have about private foundations.
The CAGP will be offering an Advanced Canadian Gift Planning Course in Toronto from June 1-3, 2016.
Today the new Liberal Government has delivered their first budget. Here is our article 2016 Canadian Federal Budget - How will it affect the Canadian charitable sector?
The CRA has provided some information on how estate donations will change in 2016. Essentially the tax benefits for bequests and certain designations may increase as there is added flexibility as which income can be offset by the estate's charitable donation.
The Department of Finance has released Legislative Proposals Relating to Income Taxation of Certain Trusts and Estates. There are a number of amendments to the Income Tax Act. The Conservative government had previously provided greater flexibility with bequest donations so that the donation could be made by the individual or the estate. However, there was a deadline of 36 months from the date of death. It has now been extended to 60 months or 5 years.
CRA recently released a letter which discusses whether a gift of a share of the capital stock of a corporation to a public foundation to which subsection 118.1(5) applies after 2015, would qualify as an 'excepted gift' as defined in subsection 118.1(19) of the Income Tax Act.
The Department of Finance in late July released for consultation purposes draft legislative proposals that will have an impact on charities. The 2 main changes are an "exemption from capital gains tax for certain dispositions involving private corporation shares or real estate where the cash proceeds are donated to a registered charity within 30 days" and "providing rules to enable registered charities to acquire or hold interests in limited partnerships in certain circumstances."
The CRA has posted guidance on the recent 2015 Federal Budget and specifically the provisions relating to donations involving private corporation shares or real estate and the ability of registered charities to invest in limited partnerships.
Properly issuing official donation receipts has been challenging for many registered charities. According to the CRA, 89% of registered charities that are audited are not correctly issuing official donation receipts. Issuing incorrect receipts can result in revocation or penalties. It is easier to do it right than fix problems later! Here is a new half-day program from Blumbergs entitled "Fundamentals of Receipting by Canadian Charities".
CRA recently released a letter which discusses whether a gift by will of marketable securities provided to a Foundation would be deemed to have been made immediately before the death of the donor. CRA concluded that the gift did constitute a gift by will made immediately before the death of the donor under subsection 118.1 (5) of the ITA. The letter appears to have been written before the 2014 budget, which will have an impact on the bequests are dealt with in estates where the testator died on or after January 1, 2016.
The British Columbia Supreme Court recently released a decision, Re Mulgrave School Foundation, which discusses charitable gifts that are made for a specific charitable purpose and whether it is possible to change that purpose. Unfortunately, in this case the donors and schools had restricted their gift to be an endowment for scholarships and they did not have in the agreement a power to amend the restrictions.
CRA recently released a letter with respect to spousal sharing of charitable gifts that was written to David Sherman, one of Canada's top tax lawyers. As a result of recent legislative amendments in Bill C-43 which received Royal Assent on December 16, 2014, CRA has changed their administrative practice with respect to spousal sharing of charitable gifts with respect to deaths occurring after 2015 (i.e. in 2016 or later). Bill C-43 included amendments affecting how will and certain designated gifts will be treated for tax purposes for gifts occurring after 2015 and according to CRA this necessitated the change. The legislative changes affect the taxation of gifts made by will - in some case they will provide greater flexibility but in other cases or situations they may deny certain tax benefits.
Mark Blumberg will be speaking on "Planned Giving and the Elderly Client" conference on January 23, 2015
The CBC has disclosed that CRA had provided them with a list of private information on taxpayers who had applied for certain tax benefits as a result of donating cultural property through the Cultural Property Export Review Board. Disclosure of confidential taxpayer information is a serious issue and CRA has released a statement apologizing for the laps and confirming that the CRA will contact each of the taxpayers who were affected. This disclosure appears to be accidental and a mistake on CRA's part.
Following up on the 2014 Budget, Finance has released draft tax legislation for consultation. The changes with respect to bequests to registered charities are from Budget 2014, and will allow some greater flexibility for claiming the charitable donations against either the estate or a trust. This bequest proposal has generally been welcomed. It will deal with some situations were there is a mismatch between the income a deceased person or their estate has and the amount of gift left to charity.
The CRA recently released a letter which discusses whether a taxpayer's estate was entitled to donation tax credits claimed for a charitable gift made by an individual in her secondary will. The use of a Primary and Secondary Will may be for a number of reasons, although typically in Ontario the assets that don't require probate are placed in a different will to those assets that do require probate. In this way some of the probate tax can be avoided. The letter discusses various issues such as whether the trustees had the discretion to make a gift to a Charity and the factors considered when determining whether a donation to a charity has been made by a taxpayer in their will.
Today Finance Minister Jim Flaherty introduced the Canadian Federal Budget 2014. The budget had a large number of provisions dealing with non-profits and charities. Here are some excerpts from the Federal Budget in one PDF document. Overall I was very pleased with the provisions of the budget dealing with charities.
The Globe and Mail recently had an article which discusses the concept of perpetual endowments as well as the use of donor advised funds and bequests. Read article >
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.