www.carters.ca
www.charitylaw.ca
b)Gifting Trust Arrangements Tax Shelters
•A typical scenario would involve a taxpayer
–Who is inclined to charitable
giving
–Becoming a beneficiary of a
Canadian resident trust, often established by a non-resident
settlor
–Receiving a distribution of
property from the trust
–Donating the property distributed
together with some cash to a pre-arranged charity
–Receiving a tax
receipt for the donation
•The
taxpayer’s adjusted cost base of the property would be equal to
the trust’s cost, which is FMV, if the trust received the property
in the first place as a gift
•Therefore,
the donor would have no capital gain on the donated property, maximizing
the tax benefit the donor received
50