A graduated rate estate ("GRE") donated a capital interest, in a charitable residual trust created by will, to a qualified donee. Is it eligible for the donation tax credit and would s. 118.1(5.1) apply?
After noting that, in order for the gift to be included in the total charitable donations of the estate (or the deceased) under (c)(ii)(B) (or s. (c)(i)(C)) of the definition in s. 118.1(1) of "total charitable gifts" (the “Definition”), there was a requirement inter alia that s. 118.1(5.1) deem the gift to have been made by the estate, CRA stated:
Subsection 118.1(5.1) applies in particular to a gift made by a GRE of an individual whose death occurs after 2015 if the subject of the gift is property that was acquired by the estate on and as a consequence of the death or is property that was substituted for that property.
...[T]he subject of the gift is the capital interest in the trust and… such capital interest in the trust cannot have been acquired by the GRE at the time of the individual's death or as a consequence of the death. Therefore, subsection 118.1(5.1) does not apply.
However, under (c)(ii)(A) of the Definition, the eligible amount of a gift of an interest in a trust could be included in the computation of the total charitable gifts of the GRE in the taxation year in which the gift is made or in any of the five subsequent taxation years.