15 August 1990 Income Tax Severed Letter ACC9308 - Qualification as a Benevolent or Fraternal Society

HEAD OFFICE                                    Rulings Directorate
Appeals & Referrals Division                   C. Tremblay
                                               (613) 952-1361
P. Cherrett

24(1)

This is in reply to your memorandum of July 12, 1990, requesting our opinion as to whether or not 24(1) Our Comments To qualify as a benevolent or fraternal society or order, the organization must be just that. The fact that such an organization holds rental real property may or may not affect its tax exempt status under paragraph 149(1)(k) of the Act.

In the case at hand, however 24(1) 24(1) Black's law Dictionary which Audit previously quoted, describes a fraternal benefit association as "one whose members have adopted the same, or a very similar, calling, avocation, or profession, or who are working in union to accomplish some worthy object, and who for that reason have banded themselves together as an association or society to aid and assist one another, and to promote the common cause. An association having a representative form of government and a lodge system with a ritualistic form of work for the meeting of its chapters, or other subordinate bodies. A society or voluntary association organized and carried on for the mutual aid and benefit of its members, not for profit; which ordinarily has a lodge system, a ritualistic form of work, and a representative government, makes provision for the payment of death benefits and (sometimes) for benefits in case of accident, sickness, or old age, the funds being derived from dues paid or assessment levied on the members."24(1) In our opinion, the intent of the legislation is not to provide tax exempt status to organizations that involve themselves in rental properties in a major way. 24(1) 24(1) We trust our comments are of assistance

B.W. Dath director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch