913214 24(1)
Dear Sirs:
Re: Donation of Employment Income
This is in reply to your letter dated November 15, 1991 wherein you requested our view on whether a charitable donation receipt may be issued by your school board to employees of the school board for amounts included in their employment income but not paid by the school board.
Our Comments
The Department's general position with respect to deductible gifts and official donation receipts is outlined in Interpretation Bulletin IT-110R2, dated May 14, 1986 and amended by Special Release dated January 27, 1989. We have enclosed a copy for your information. We believe that in order to qualify as a gift there must be a voluntary transfer of real or personal property from a donor, who must freely dispose of his or her property, to a qualified donee who receives the property given. To qualify, the donation must be in the form of an outright gift. Any legal obligation on the payor would cause the transfer to lose its status as a gift. Further, in order for an expenditure or transfer of property to be considered a gift, it must be made without conditions, from detached and disinterested generosity, out of affection, respect, or charity or like impulses, and not from the constraining forces of any moral or legal duty.
In the situation outlined in your letter, where an increase in employment income would be offset by a required payroll withholding, it is our view that no gift would be considered to have been made regardless of the purpose of the arrangement.
We trust this will be of assistance to you.
Yours truly
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
c.c. Charities Division b.c. Windsor District Office