| 24(1) | File No. 900130 |
| Bill Guglich | |
| (613) 957-2102 |
Attention: 19(1)
June 18, 1990
Dear Sirs:
This is in reply to your letter of December 8, 1989 concerning registered Canadian political parties. We regret the delay in replying to your inquiry.
There are no provisions in the Income Tax Act (the "Act") which would prohibit a registered Canadian political party from:
(1) receiving the proceeds of a life insurance contract,
(2) owning or being named beneficiary of a life insurance contract, or
(3) soliciting persons for the purpose of placing a life insurance contract on their lives.
Registered Canadian political parties are however generally considered to be non-profit organizations for purposes of the Act.
In order for a particular registered Canadian political party to maintain its tax exempt status, under paragraph 149(1)(1) of the Income Tax Act, it must comply with certain condition respecting the use of its funds. These conditions include:
(1) the fund must be used exclusively in carrying on its exempt objectives (please refer to the comments in paragraph 8 & 9 of Interpretation Bulletin IT-496), and
(2) no part of its funds may be paid, payable or otherwise available for the personal benefit of any member (please refer to paragraph 11 & 12 of Interpretation Bulletin IT-496).
A copy of Interpretation Bulletin IT-496 is enclosed.
We trust this will be of assistance.
Yours truly,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch