RECENT TAX growths PROVIDE EXTRA IN...

RECENT TAX growths PROVIDE EXTRA INCENTIVE

The federal Ecological Gifts Program provides incentives for proprietors of ecologically sensitive land to defend nature and leave a legacy for to come generations. The Program, made possible at provisions of the Income Tax Act and administered on Environment Canada, provides significant tax incentives to landowners who donate ecologically sensitive land, or a partial interest in ecologically sensitive land, to a qualified recipient as it is as a land conservation arrange or a government agency. It is then the recipient's responsibility to make secure the land's biodiversity and environmental heritage are patronizeed in perpetuity.

In British Columbia, a conservation covenant granted beneath section 219 of the Land Title Act may be the make submissive of an ecological gift.

Since 1995 centurys of Canadians have donated ecological gifts valued at more than 50 million dollars combined. More than one-third of these ecological gifts contain habitats of national or provincial importance. Many include rare or threatened habitats that are to one's home to species at risk.

Depending in succession the recipient, up to three certificates are required subject to the Income Tax Act for the certification of ecological gifts:

* The federal Minister of the Environment or a designate must certify that the land comprising the gift is ecologically sensitive.

* If the recipient is a registered charity, the Minister of the Environment or a designate must certify that the recipient of the ecological gift is approved to receive the gift.

* The Minister of the Environment must certify the fair market value of the land comprising the ecological gift.

As with other charitable gifts in a less degree than the Income Tax Act, ecological gifts on individual donors are eligible for a non-refundable federal tax credit of 16% of the first $200 of the fair market value of the gift and 29% of the balance. The combined rate in BC is 206% for the first $200 and 437% for the balance. Corporations may take out from income an amount up to the fair market value of the ecological gift.

Ecological gifts have the following tax advantages:

* Unlike most numerous other charitable gifts, there is no limit to the total value of the ecological gift donations that are eligible in a given year for the deduction or credit.

* Donors of ecological gifts receive a reduction in the taxable capital gain they earn in the disposition of their peculiarity if it's capital property. And unlike principally other charitable gifts, the taxable portion of the capital gain is single 25%.

* Any unused portion of the donor's gifts may be carried forward for up to five years.

* A donor's capital gain can also be reduc at designating the amount of the ecological gift to be a lower amount.

These last couple advantages are not unique to gifts of ecological ownership The reduced taxable capital gain applies to ecological gifts, donations of certain publicly traded securities, and certified cultural property

One additional benefit for donors is that the CCRA may impose a tax upon a municipality or registered charity that receives an ecological gift and then disposes of it or changes its use without the approval of the Minister of the Environment or the Minister's designate.

For more information forward the Ecological Gifts Program, visit the website at www.cws-scf.ec.gc.ca/ecogifts/ or contact the regional coordinator for the Pacific and Yukon Region of the Program at blair.hammond@ec.gc.ca

The benefits of split-receipting

Another new change in tax rules involves the ability of donors to make a gift of land-or any other original of property-and receive something of value in respond In December 2002, the CCRA issued propos guidelines onward "split-receipting" in relation to gifts in subordination to the Income Tax Act. Split-receipting may be available where a donor gives a gift to a charity or other qualified donee and receives something of value or about other benefit in return. below split-receipting, the donor receives a tax receipt for the value of the gift, minus the value of the benefit that was given in return

Before the introduction of these guidelines, it was the CCRA's view that if the donor received something in turn back for making a donation, the gift was not a gift subordinate to the Income Tax Act and the donor did not qualify for a tax receipt. This meant a donor had to give the whole gift and receive nothing in respond in order for the gift to qualify for tax benefits. Now, in subordination to the proposed guidelines, the amount eligible for a tax receipt is the exces of the value of the possessions transferred to the recipient through the amount of the advantage provided to the donor.

Even nevertheless the guidelines are still in draft form and legislative and related policy amendments are not even now in place, the CCRA has stated that donors and recipients may chase the guidelines starting on the announcement date: December 20 2002

According to the propos guidelines, split-receipting is generally allowed in subordination to the following circumstances:

* The transfer of ownership must be voluntary, and the gift must have an ascertainable value;