2019-0830781E5 Charitable gift annuity and 60(l) rollover

Principal Issues: Whether we would reconsider our position that a charitable gift annuity issued by a registered charity is ineligible for a tax-deferred rollover under paragraph 60(l)?

Position: No.

Reasons: A limited exemption under provincial insurance law does not amount to an authorization to carry on an annuities business in Canada.

Author: Doiron, Wayne
Section: 60(l)(ii)

XXXXXXXXXX                                                                                  2019-083078
                                                                                                          W. Doiron
January 23, 2020

Dear XXXXXXXXXX

Re:  Eligibility of charitable gift annuity for 60(l) rollover

This is in reply to your follow-up letter dated November 12, 2019 in which you ask us to reconsider our position in technical interpretation 2018-075861 that a charitable gift annuity is ineligible for a tax-deferred rollover under paragraph 60(l) (footnote 1).

Our comments

This technical interpretation provides general comments about the provisions of the Income Tax Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R9, Advance Income Tax Rulings and Technical Interpretations.

We have carefully considered the information that you have provided, but our position remains unchanged. In our view, the fact that provincial insurance law may exempt a charitable organization from the application of certain legislative requirements with respect to the issuance of charitable gift annuities does not amount to the organization being licensed or otherwise authorized under that law to carry on an annuities business in Canada. Consequently, a charitable gift annuity issued by such an organization would not satisfy this particular requirement of subparagraph 60(l)(ii).

As previously mentioned, if you wish to pursue a legislative change, we suggest that you contact the Department of Finance Canada.

We trust our comments will be of assistance.

Yours truly,

Dave Wurtele
Section Manager
for Division Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

FOOTNOTES

Note to reader:  Because of our system requirements, the footnotes contained in the original document are shown below instead:

1  Unless otherwise stated, all statutory references in this letter are references to the provisions of the Income Tax Act.

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