DUE DILIGENCE: GIFTING ARRANGEMENT TAX SHELTER

As with all other financial transactions, due diligence is needed in choosing the right Gifting Arrangement that best suits you.  Here are some things you need to know in choosing a Gifting Arrangement Tax Shelter:

1.       Ensure there is a Tax Shelter number (TS#)

2.       Ensure the transactions are structured legally.

3.       Ensure the transactions make business sense.

4.       Ensure there is a legal opinion by a reputable lawyer.

5.       Ensure there is a defense fund in place to back the program.

6.       Ensure the charities are Registered Canadian Charities.

7.       Ensure the organizations involved could function without the tax shelter being in existence.

8.       Ensure the cause is real and there is a real benefit for recipients.

WHAT ARE GIFTING ARRANGEMENTS

Gifting Arrangements are powerful as they provide tax savings for people who want to contribute to great humanitarian causes.  Through Gifting Arrangements, Canadians can raise money much faster for charities and cases faster than most other fundraising vehicles.

The first thing you need to know is that CRA has announced that they will challenge all Gifting Arrangement Tax Shelters in Canada.  You will probably be reassessed. The key factor is to pick the winners that will be able to withstand CRA’s challenge and deal with CRA through out the years and likely win in Court.