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FEDERAL INCOME TAX - Computation of tax - Individuals - Tax credits - Charitable donations

Wednesday, November 18, 2020 @ 6:24 AM  


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Appeal by van der Steen from a Tax Court judgment that denied his claim for a charitable donation tax credit in relation to a payment he made to the Canadian Literacy Enhancement Society in 2004. In determining how to complete a withdrawal from his RRSP in the most tax-efficient manner, the appellant was advised by one of the founders of the Society to donate the full amount withdrawn from the RRSP. The appellant withdrew $64,829 from his RRSP and made a payment to the Society of $65,000. The payment was not consistent with the appellant’s prior or subsequent donation history.

HELD: Appeal dismissed. The Tax Court did not err in finding the appellant had the onus of proving, on a balance of probabilities, that he had the requisite donative intent. Its finding that the appellant’s mere statement of what he intended was not sufficient to establish that he had the requisite donative intent was supported by an examination of the tax implications that arose from the appellant’s “tax plan”. It was not logical that the appellant would withdraw over $64,000 from his RRSP to retain less than two per cent of that amount for his personal use. There was no basis to interfere with the Tax Court’s finding that the appellant failed to establish he had the requisite donative intent to qualify the payment as a charitable donation. No delay or unfairness warranted intervention.

Van der Steen v. Canada, [2020] F.C.J. No. 972, Federal Court of Appeal, W.W. Webb, J.B. Laskin and M. Rivoalen JJ.A., October 8, 2020. Digest No. TLD-November162020005