Standard 10: Tax Consequences
The land trust works diligently to see that every charitable gift of land or conservation agreements meets federal and provincial tax law requirements.
Background
As the beneficiary of the tax receipt, the landowner, not the land trust, has the primary responsibility to comply with the specific requirements regarding federal or provincial tax deductions for the donation of land or conservation agreements. Nevertheless, land trusts have a responsibility to see that those requirements are met and should take reasonable measures to ensure that landowners understand those requirements and consult their own advisors about meeting them. The land trust’s role is important in that deductions that are overturned by the Canadian Revenue Agency may make future potential donors wary of working with land trusts, could lead to investigations of the land trust and, ultimately, can reduce public support for deductions as incentives for land conservation. A land trust must take care never to guarantee or appear to guarantee that a deduction will be allowed or what its value will be, but the land trust can help guide the landowner and establish policies to protect the land trust.
Relevant Law
- Income Tax Act, SC 1985, c. I, s. 149.1 (6.3);
see also Canada Revenue Agency policy interpretations at
- Property Law Act, RSBC 1996, c. 377, s. 35.
- Land Title Act, RSBC 1996, c. 250, s. 218-223.
- Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I; see:
PRACTICE
C. Ecological Gifts Program
Where appropriate, the land trust informs potential donors about the Ecological Gifts Program including the increased tax benefits associated with making a gift under the program. Land trusts are aware of, and where necessary, advise potential donors about, the consequences of unauthorized disposal or change in land use of Ecological Gifts. The land trust ensures that properties donated under the Ecological Gifts Program are appraised and certified according to the standards of Environment Canada and, where applicable, provincial standards.
Background
The Ecological Gifts Program can provide landowners with additional tax benefits that might not be achieved with a standard donation. However, this program may not benefit every landowner. Land trusts should be familiar with the tax implications of the Ecological Gifts Program as well as provincial and federal requirements for donations under the program. Recipients that dispose of, or change the use of, lands or conservation agreements are subject to penalties under the Income Tax Act (ITA S.207.31) unless they receive written authorization to dispose of or change use of the lands from Environment Canada.
