Authored by Philip Milley, Associate Director of Legal Affairs

The Canada Revenue Agency (“CRA”) recently released a folio on Split-receipting and Deemed Fair Market Value. This folio provides CRA’s technical interpretation of subsections 248(30) to (41) of the Income Tax Act. CRA has a less technical discussion of the split receipting rules that was most recently updated May 2018. 

Income tax folios were introduced in 2013 and provide CRA’s technical interpretation of provisions of the Income Tax Act. Folios replace various income tax interpretation bulletins and are intended for use by tax professionals and those who have an interest in tax law. Folios reflect CRA’s interpretation of the Income Tax Act and are not a substitute for the law.

This new folio consolidates and cancels two CRA publications: Interpretation Bulletin IT-110R3, Gifts and Official Donation Receipts and Income Tax Technical News No. 26 (ITTN 26). The update to the folio improves readability, lists noteworthy substantive technical and interpretative changes to the Act and Regulations. Notable changes include new more relevant examples of split-receipting and newly drafted guidelines on how to determine:

• whether there is a gift
• the amount of the advantage
• the eligible amount in fundraising situations.

The Folio also identifies a proposed legislative change to the eligible capital property rules, that are pending legislation implementing the 2016 federal budget.