Summary Policy

Date
October 25, 2002 (Revised November 30, 2005)

Reference Number
CSP - A06

Key Words
Annuities - Planned giving

A charitable gift annuity is an arrangement under which a donor transfers capital to a charitable organization in exchange for immediate guaranteed payments for life at a specified rate depending on life expectancy or for a fixed term.

A charitable organization may enter into arrangements to issue annuities without jeopardizing its status as a registered charity. Charitable foundations, however, cannot enter into arrangements to issue annuities since an undertaking to make an annuity payment is considered a debt, which is a ground for revocation under the Income Tax Act.

• Planned Giving, CSP-P01.
• Annuities, CIL-1998-030, CIL-2000-008.
• Income Tax Technical News, Issue 26.
• Income Tax Act, R.S.C. 1985 (5^th supp.) c. 1, ss. 149.1(3) and (4).