| 24(1) | 901710 |
| C. Tremblay | |
| (613) 952-1361 | |
| Attention: 19(1) | EACC9285 |
August 22, 1990
Dear Sirs:
This is in reply to your letter of July 23, 1990, concerning your request for a ruling. You seek our views as to 24(1)
As advanced income tax rulings are only given in respect of proposed transactions subject to the guidelines in Information Circular IC 70-6R (a copy is enclosed for your information), we can only provide you with some general comments.
24(1)
24(1)
OUR COMMENTS
A gift is a voluntary and gratuitous transfer of real or personal property without consideration. No right, privilege, material benefit or advantage may accrue to the donor or to the person designated by the donor. In order for the "gift" to qualify as a charitable donation, it must be made entirely separate and unrelated to any subsequent use. Decisions regarding specific beneficiaries of its established programs must be the exclusive responsibility of the charity.
In determining whether the 24(1) should issue a receipt in respect of a contribution by an individual staff member, the following guidelines should be considered:
- Amounts should be paid to the 24(1) and must be unconditional.
- Any designated purpose should be part of the general activities of the 24(1) for which donations would normally be accepted.
- Generally, individuals who have made such contributions and who wish to propose that 24(1) funds be expended on particular activities should submit applications for funds or equipment to a committee responsible for administering such funds or equipment for the particular activities.
- Such an application should adequately document the proposed use of the funds or equipment.
- Funds or equipment should only be allocated to the individual or his department after applying the standard evaluation criteria for such allocation.
- Any equipment purchased or expenditures made with contributed funds must be of such a nature that it would be reasonable for the 24(1) to acquire such equipment or expend such funds and the usual controls with respect to the use of 24(1) equipment or expenditure of 24(1) funds should be in force.
- There can be no direct connection between the amount of the individual's contribution and disbursement from the fund or allocations of equipment to that person, nor should there be any option to purchase equipment acquired with the funds at the end of a certain time period.
As is evident from these remarks, for the contribution by a staff member to be a "gift" for income tax purposes, it is important that the contribution not be dependant upon the subsequent acquisition of equipment for the use of the staff member. Whether two transactions are dependant upon each other is a question of fact. 24(1)
We trust our comments are of assistance.
Yours truly,
E.M. Wheeler for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch