In somewhat general terms, the numerical limit in the s. 118.1 definition of ”total gifts” as to the amount of an individual’s total charitable gifts for a year that will qualify for credit is increased (under Variable B of the definition) by 25% of the individual’s taxable capital gains for the year in respect of gifts made in the year whose eligible amount is included in the charitable gifts total (so that the normal 75%-of-income limitation is increased in this regard to 100%).
An individual settles a charitable remainder trusts (CRT) with capital property and gifts the remainder interest in the CRT to a qualified donee that is a registered charity, with the eligible amount of such gift being included in the individual’s “total charitable gifts.” CRA indicated that since the gift was of an equitable interest in the CRT and not of the capital property with which the trust had been settled, the taxable capital gain arising on the settlement of the CRT did not increase Variable B.