Changes to the Alternative Minimum Tax (AMT) rates and rules are scheduled to take effect on January 1, 2024. For the first time AMT will apply to charitable donations from high-income individuals, which is worrying for charities and donors. Simply, targeting donations is poor tax policy that will produce unintended…
Tag: estate donations
Total 16 Posts
Estate planning is an exercise in time travel. It is impossible to predict the future, especially when the time gap between planning and death is often decades. Fast forward 25 years, a charity may not exist when the estate is distributed. Charity law identified this problem and a solution to it over…
A direct designation gift of RRIF or life insurance proceeds is an estate donation, but lawyers and executors have little or no role to play. Normal procedural and disclosure rules don’t apply. How do charities ensure they receive their intended gift? How does the estate receive its tax receipt? Direct…
Tax relief for an estate donation cannot be claimed until the property is transferred to a charity. No tax receipt; no tax credits. If the distribution is after 60 months after death of the donor there is no tax receipt at all. But what if the estate has illiquid assets…
The 2016 introduction of the Graduated Rate Estate (GRE) regime was accompanied by the “estate donations” rules. These Income Tax Act provisions altered the administrative and tax treatment of gifts by will, as well as direct designation gifts of life insurance, RRSP/RRIFs, and TFSAs. How are charities and executors managing…
Recently I received an inquiry from a life insurance advisor about a client who wished to establish a policy and donate it to two charities. My colleague wanted to know if this was possible. In my experience it is possible, but not the best way to do it. Donation Structures…
Organized religion has been the bedrock of the Canadian charitable sector. When charities were first required to register federally in 1967, over 60% of organizations were religious and most were churches. As of January 2022, Christian charities represent just 29.7% of Canada’s 86,080 registered charities. The implications for society, giving,…
A crisis may change long-held views. In reaction to the devastating economic effect of COVID-19 a couple of regulators have loosened their rules related to two different types of charitable property. Will these changes be temporary or will they lead to long-term change? And what effect does it have on…
Legal precedents are invaluable – except, that is, when they are wrong or out of date. Recently a Scotiatrust colleague contacted me about a clause in a client’s will that was intended to create an endowment fund at a registered charity. The clause imposed a 10-year capital hold on the…
In early February, the Tax Court of Canada put another nail in the coffin of “one of the biggest tax scams in Canadian history.” The case involved the Global Learning Gift Initiative, a charitable tax shelter that attracted 40,000 investors who – through a complex structure with no clear public…