Recently, the Canada Revenue Agency's
("CRA's") historic administrative position permitting
a spouse to claim charitable donation tax credits for a donation
made by his or her spouse was legislated into the Income Tax Act
(Canada) with the passage of Bill C-43, which received Royal Assent
on December 16, 2014. It has also been the CRA's
administrative practice (see e.g. CRA document no. 2010-0372621E5)
where one spouse has died to permit the surviving spouse and the
executor of the deceased spouse's estate to decide between them
whether a charitable donation tax credit for a gift made by the
deceased spouse's will shall be claimed by the executor on
one of the deceased spouse's terminal return or by the
surviving spouse.
Bill C-43 also introduced a provision that deems a gift by will to
have been made by an individual's estate, rather than by the
deceased individual immediately before his or her death as was
previously the case. In certain circumstances (i.e., where
the deceased individual's estate is a graduated rate estate),
the executor may choose to use the charitable donation tax credit
on either the estate's tax return or one of the deceased
spouse's tax returns. In a recent technical
interpretation, CRA document no. 2014-0555551E5 -- "Spousal
sharing of charitable gifts" (January 27, 2015), the CRA was
asked whether this new deeming provision overrides the CRA's
administrative practice of permitting a surviving spouse to claim a
charitable donation tax credit for a gift made by the deceased
spouse's will. The CRA responded that the
definition of "total charitable gifts", which sets out
what gifts can be claimed by an individual on his or her tax
return, does not include gifts made by an individual's
spouse's graduated rate estate. As a result, the CRA
indicated that its administrative practice of allowing a surviving
spouse to claim a charitable donation tax credit for a gift made by
the deceased spouse's will shall no longer apply in respect of
deaths occurring after 2015.
Do you have questions about claiming donation tax credits for
gifts made by will? We'd be happy to chat!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
