Standard 9: Ensuring Sound Transactions
The land trust works diligently to see that every land and conservation agreement transaction is legally, ethically and technically sound.
A land trust usually intends to protect the property it conserves in perpetuity. To help secure the perpetual conservation of land, its transactions must hold up over time and withstand challenges. Sound transactions rely on the land trust performing “due diligence” in its transaction steps. Land trust representatives need not be lawyers, but they must have good legal advice, and they should familiarize themselves with basic principles of real estate and tax law. The land trust should draw a landowner’s attention to issues that must be addressed as the transaction proceeds. However, a land trust should not represent itself as giving specific legal or financial advice; a landowner’s own advisors should do that. A land trust may have to call on other financial and technical experts in order to complete the transaction. Carefully documenting the steps a land trust takes in performing its due diligence can help secure the perpetual conservation of the property.
- 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:
- Environmental Management Act, SBC 2003, c. 53, s. 40
- Contaminated Sites Regulation, BC Reg. 375/96, as am., s. 3.
- Land Title Act, RSBC 1996, c. 250, Parts 10 and 10.1
- Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I;
see Income Tax Technical News No. 26 at:
- Taxation (Rural Area) Act, RSBC 1996, c. 447.
- School Act, RSBC 1996, c. 412.
- Police Act, RSBC 1996, c. 367.
- Property Transfer Tax Act, RSBC 1996, c. 378.
- Social Service Tax Act, RSBC 1996, c. 431.
M. Split Receipting
The land trust should be familiar with the CRA's guidelines for split receipting and how it relates to property transactions, including Ecological Gifts. If necessary, the land trust should obtain outside expertise to assist them with any split receipting transactions.
Land trusts should consult the CRA's Income Tax Technical News No. 26 for information about split receipting. Under those guidelines, split receipting transactions must meet four criteria: the transfer of property must be voluntary and the gift must have an ascertainable value; the recipient must be qualified to receive the gift; any advantage received or obtained by the donor must be identified and its value ascertainable; and the donor's intent to enrich the recipient of the gift must be clear.
BC Assessment Questions
- Does the land trust commission an appraisal for lands that are donated/purchased as split receipts?
- Does the land trust document the donor’s intent to make a split receipt donation?
- Does the land trust advise potential donors of the possibility of split receipting when negotiating land purchases and in particular of the enhanced tax benefits for split receipts that are eligible under the Ecological Gifts Program?
CLTA Assessment Questions
- Is the land trust familiar with guidelines for split-receipting?