28 May 1990 Income Tax Severed Letter AC74840 - Blocked Currency Donations

May 28, 1990

         Charities Division               R.B. Day
         A.M. Smiley                      957-2136
Subject: Blocked Currency Donations       7-4840

We are writing in reply to your memorandum of March 28, 1990, wherein you requested our views regarding the above noted subject relative to the questions posed in the March 2, 1990, letter from 24(1)

Our understanding of the situation set out in 24(1) letteris as follows:

                              24(1)
Our Comments 

We will respond to the questions posed in      24(1)     letter
in the order in which they appear.

1. The definition of property, as set out in subsection 248(1), states that unless a contrary intention is evident, property includes money. As a consequence it is our view that the blocked currency would be considered to be property and that paragraph 3501(1)(e.1) would be applicable to the blocked currency donation.

With respect to the second part of 24(1) question, it would appear to be an administrative matter that could best be answered by your division. However, we note that official exchange rates for countries such san LDC frequently bear little relationship to the fair market value of their currency. Accordingly, the proposed procedure may substantially over-state the value of the gift to the registered charity.

2.       We are enclosing, for your information, copies of recent
advance income tax rulings regarding     24(1)     which dealt
with the issue of          24(1)                   Unless you
have some administrative concerns regarding paragraph 18 of
IC-
80-10R, the favourable rulings issued indicate that we are not
offended by this aspect of their proposed transactions.

3. This Branch has not developed any particular policies with respect to blocked currency donations. To the extent that this question involves an administrative matter, it would best be answered by your division.

We trust our comments will be of assistance to you.

Director Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch