The Nuts and Bolts of Gifts involving Cultural Property” by Florence I. Carey -great Canadian paper

Here is a copy of 2010 paper “The Nuts and Bolts of Gifts involving Cultural Property” by Florence I. Carey of Aikins, MacAulay & Thorvaldson LLP in Winnipeg. 

Additionally here is a copy of Florence Carey’s powerpoint slides for the “The Nuts and Bolts of Gifts involving Cultural Property”.

Here is the Introduction/Overview

“The Cultural Property Export and Import Act (Canada)1 contains provisions to encourage the acquisition of national treasures (cultural property) by institutions and public authorities within Canada which are best able to preserve and exhibit them to the public. At a high level, the provisions include the “designation” of those institutions or public authorities authorized to receive gifts of cultural property, and the creation of the Canadian Cultural Property Export Review Board (the “Review Board”) which is tasked with the “certification” of cultural properties that meet the desired criteria. The scheme of the Cultural Property Act is supported by provisions of the Income Tax Act (Canada)2 which provide for enhanced income tax incentives for donors of such cultural properties. These generally include relief from taxation of any capital gain arising on the disposition of the property, and a charitable donation receipt for the fair market value of the property. For purposes of calculating the income tax benefits, at the time that the Review Board certifies that a property meets the criteria, it also determines the fair market value thereof, which is deemed to be the fair market value for purposes of the Tax Act. Together, the provisions of the Cultural Property Act and the Tax Act provide strong incentives for the gifting of cultural property to museums and art galleries, allowing such organizations, which are frequently short of acquisition funds, to increase and enrich their collections.

This paper will:
(I) review the provisions of the Cultural Property Act set out above in detail, in order to promote an understanding of the mechanisms, requirements and restrictions;
(II) examine the application process for certified cultural property in order to provide an overview of the process and the appeal rights thereunder;
(III) review the applicable provisions of the Tax Act and the benefits provided to donors and vendors thereby; and
(IV) review some of the current challenges and issues relating to the scheme.”