by admin | Feb 25, 2016 | Charity & Not-for-Profit Law
On February 4, 2016, the Australian Centre for Philanthropy and Nonprofit Studies (“ACPNS”) at the Queensland University of Technology (“QUT”) in Brisbane, Australia, published a webpage for the Giving Australia 2015-2016 Project (the “Project”). The Project, led by ACPNS, is carried out in conjunction with the Centre for Social Impact at Swinburne University of Technology and the Centre for Corporate Public Affairs and is the largest ever study concerning philanthropic behaviour conducted to better understand how, why and how much Australians give to charity. The Project has received $1.7 million in funding and will operate through to September 30, 2016, with the end goal of developing new policies and ideas to assist organizations and communities across Australia.
The Project will involve the collection of data from individuals, charities, philanthropists and businesses in order to identify any potential barriers and opportunities to make giving and volunteerism more accessible to Australians, and raise awareness and increase education about the needs of non-profit organizations. The Project has formed research partnerships with a variety of research centres and actors in the non-profit sector. Recent publications from participants in the Project may be found in a separate tab on its website.
The Project is part of the Australian Prime Minister’s Community Business Partnership, whose mandate is to advise the Australian government on practical strategies that encourage philanthropic giving, volunteering and investment in Australia. The Project invites anyone interested in participating in its research to apply in the “Participate in Our Research” tab of its website.
by Dev User | Jan 28, 2016 | Charity & Not-for-Profit Law, Faith-Based Organizations
Protecting Charities and Not-for-Profits Participating in Refugee Sponsorship Programs
Update on GRE Impact on Estate Donations
Proposed Amendments to the Donation Tax Credit
CRA to Wind Down Political Activities Audits
CRA News
Corporate Update
Tax Court Rulings of Interest to Charities
CRA Views in Focus
Supreme Court Rules on Copyright
CRTC Serves its First Warrant Under CASL
Employer Financial Status Will Not Reduce Termination Notice
BC Supreme Court Quashes Law Society’s Decision to Reject TWU Law School
New Ontario Acts Address Forfeited Property of Dissolved Not-for-Profit Corporations
Ontario Introduces Concussion Legislation
Not-for-Profits Should Take Notice of Coming Community Benefit Agreements
Ontario Reforms and Standardizes Police Record Checks
Anti-Terrorism Law Update
Retirement Announcement – Bruce Long
January 2016 Charity & NFP Law Update
by Dev User | Jan 28, 2016 | Charity & Not-for-Profit Law, Expertise
Charity & NFP Law Bulletin No. 377, January 27, 2016
Charities and not-for-profits involved in refugee sponsorship (“Refugee Support Organizations”), particularly those who are a refugee Sponsorship Agreement Holder with the federal government (“SAH”), are facing an influx of needs and requests that has not been seen in Canada in decades. In the months since the new Liberal government’s initiative began, SAHs and Refugee Support Organizations have constituted the “front line” facing the recent surge of requests for aid and refugee sponsorship. In particular, SAHs and the federal government are struggling to meet the real and significant need that exists to help facilitate refugees’ sponsorship, passage, and integration into Canada. For the refugees and their families, many of whom are fleeing from Syria and other conflict areas, this journey is one of the most dramatic and life altering experiences any individual may endure. To a lesser extent, but by no means less important, both SAHs and Refugee Support Organizations are having to either start “fresh” or exponentially increase a previously small refugee sponsorship program in order to address the current influx of refugees in Canada.
To read more, please see Charity and & NFP Law Bulletin No. 377.
by admin | Jan 28, 2016 | Charity & Not-for-Profit Law
As of January 1, 2016, testamentary trusts are now subject to tax at the top federal marginal tax rate (“flat top-rate”), as opposed to graduated tax rates, which apply to individual taxpayers. There are, however, exceptions in that graduated tax rates will still apply to Graduated Rate Estates (“GREs”), as defined in subsection 248(1) of the Income Tax Act (“ITA”). A GRE is an estate that arises on and as a consequence of an individual’s death, if it arises no longer than 36 months after the death and the estate is a testamentary trust at that time. The estate must also designate itself as a GRE in its first T3 income tax return, it must be the only estate to have designated itself and it must include the individual’s social insurance number for each tax return in the 36 months after the individual’s death.
New rules have also come into effect for charitable donations made by will, if the death occurs after 2015. Specifically, a charitable gift is now considered to have been made at the time it is actually transferred to a donee, as opposed to immediately before the testator’s death. In accordance with subsection 118.1(1) of the ITA, if the estate is a GRE, the charitable donation can now be allocated between the deceased or the GRE and unused amounts can also be carried forward. Further information on the current rules regarding GREs and estate donations can be found at the following CRA websites: Estate Donations – Deaths after 2015 and Graduated Rate Taxation of Trusts and Estates and Related Rules, as well as our November 2015 Charity & NFP Law Update.
With regard to the new GRE rules, on January 15, 2016, the Department of Finance (“Finance”) released for consultation Legislative Proposals on the Tax Rules for Certain Trusts and Their Beneficiaries (the “Legislative Proposals”) and Explanatory Notes with an accompanying press release. The Legislative Proposals, if passed, would modify the income tax rules mentioned above for the treatment for certain trusts and beneficiaries, including allowing greater flexibility in the income tax rules for recognizing charitable donations made by an individual’s former GRE.
The Legislative Proposals follow a November 16, 2015 letter from Finance which responded to submissions from the Joint Committee on Taxation of the Canadian Bar Association and Chartered Professional Accountants of Canada (“Joint Committee”), the Conference for Advanced Life Underwriting, and STEP Canada (the “Representatives”) regarding amendments to the ITA, which were enacted under the Economic Action Plan 2014 Act, No. 2 (“Budget 2014”), and have since come into effect. The submission from the Representatives, in particular, addressed concerns about subsection 104(13.4) and other provisions of the ITA, which deal with the impact of a beneficiary’s death on the taxation of spousal, alter ego and joint partner trusts, all of which could potentially have a negative impact on charitable giving.
Finance asserts that the Legislative Proposals contain amendments that will provide greater flexibility with regard to the recognition of charitable donations made by an individual’s former GRE. Finance also invites interested parties to provide comments on the Legislative Proposals to [email protected] by February 15, 2016. More detailed analysis concerning the changes to graduated rate taxation of testamentary trusts and estate donations will follow in the February 2016 Charity & NFP Law Update by Elena Hoffstein as a guest contributor.
by admin | Jan 28, 2016 | Charity & Not-for-Profit Law
On December 7, 2015, the Honourable Bill Morneau, Minister of Finance (“Minister”), announced changes to the federal personal income tax rates for individual taxpayers as of January 1, 2016. The announcement was accompanied by the release of a Notice of Ways and Means Motion to Amend the Income Tax Act and a Backgrounder containing additional details on related changes to the federal donation tax credit. Bill C-2, An Act to Amend the Income Tax Act, was subsequently tabled in the House of Commons by the Minister on December 9, 2015 to amend the formula currently used to calculate the donation tax credit in subsection 118.1(3) of the Income Tax Act (“ITA”).
The current formula for the donation tax credit permits a non-refundable credit of 15% for the first $200 of a taxpayer’s donations and 29% for the amount of donations over $200 up to 75% of the individual’s net income. Twenty-nine percent is the current top tax rate for those with income above $138,586, but the proposed amendments will result in changes to the current tax rates, including a tax rate of 33% applying to income over $200,000. The Department of Finance’s Backgrounder states that these amendments will “allow higher-income donors to claim a 33-per-cent tax credit on the portion of donations made from income that is subject to the new 33-per-cent marginal tax rate.” Although taxpayers can generally carry forward and claim donations made in the previous five years, the Backgrounder further states that the “change will be effective for the 2016 and subsequent taxation years.”
While these amendments were presumably intended to neutralize any negative impact of the increased tax rate on donations from high income earners in 2016 and beyond, it will be interesting to see how the Canada Revenue Agency (“CRA”) will implement the changes once they become law. In particular, since taxpayers do not currently have to provide all supporting documents at the time of filing, it remains to be seen whether the increased benefit to high income earners will also be accompanied by increased scrutiny of their tax returns in order for CRA to ensure that the donations claimed at the 33% tax rate do not pertain to previous tax years.
by admin | Jan 28, 2016 | Charity & Not-for-Profit Law
On January 20, 2016, the Minister of National Revenue, the Honourable Diane Lebouthillier (the “Minister”), announced that CRA will be winding down the audit program directed at the political activities of charities once the ongoing audits have been finished.
The Minister announced that the audit program is being wound down because it has revealed substantial compliance with the rules that govern political activities. Of the 30 completed audits, only 5 have resulted in decisions to revoke the charities’ registration, and all for reasons that were primarily outside their involvement in political activities. The 24 audits still underway will continue “so that the CRA can address any serious deficiencies, consistent with the approach used in the regular charities audit program.” The six remaining scheduled audits will not proceed as political activities audits.
In her announcement, the Minister affirmed the independence of the Charities Directorate with respect to audits, stating that “the independence of the Charity Directorate’s oversight role for charities is a fundamental principle that must be protected. The Minister of National Revenue does not and will not play a role in the selection of charity audits or in the decisions relating to the outcomes of those audits.”
In keeping with Prime Minister Trudeau’s mandate letter to the Minister, reported in our November 2015 Charity & NFP Law Update, the Minister also reaffirmed the government’s commitment to clarifying the rules governing the involvement of charities in political activities, and announced that details of consultations with stakeholders in the charities sector will be forthcoming.
While the news that CRA is concluding the political activities audits and will be holding consultations with the charitable sector are welcome, charities should be mindful that the rules with respect to political activities are still in place and must be followed. Information about the CRA’s Political Activities Policy Statement can be viewed on their website.
