This prior administrative practice was carried through in respect of gifts by Will of a spouse such that under the prior administrative practice, if a deceased spouse made a gift by Will, the surviving spouse was able to claim the charitable gift arising from a gift by Will of their deceased spouse. This was confirmed in prior CRA commentary. (See November 2010 As a Matter of Tax article entitled “Logistics of charitable gifts made by Will”.)
A recent technical interpretation (#2014-055551 dated January 27, 2015) asked if the prior administrative practice would continue to apply in 2016 when the new estate donation rules come into effect. In essence these new rules deem a gift by Will to be made by the estate of the deceased person when the property that is the subject matter of the gift is transferred to a charity and only if the estate is the “Graduated Rate Estate” (GRE) would there be the ability to carry the donation back to the terminal return of the deceased individual. The current CRA interpretation confirmed that the prior administrative practice would no longer apply and that the new codification does not go as far as the prior administrative practice.
In other words – NO. Where a gift is made by Will it cannot be shared with a spouse. It can only be used by the estate and if it is the GRE then additional flexibility is available to carry it back to the deceased. Starting in 2016, a surviving spouse cannot share the tax credit arising from a gift by Will of their deceased spouse.
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