Frequently Asked Questions – Movable Cultural Property

General

  1. What is the Canadian Cultural Property Export Review Board?
    The Review Board is an independent administrative tribunal that reports to the Minister of Canadian Heritage, whose ten members are appointed by the Governor-in-Council. Its purpose is to encourage the protection and retention of cultural property in Canada, in order to build and maintain Canada’s national heritage.
  2. What is the Review Board’s role in the certification of cultural property?
    The Review Board reviews applications for certification of cultural property; determines outstanding significance, national importance, and fair market value for income tax purposes; and issues Cultural Property Income Tax Certificates(T871).
  3. What is the Review Board’s role in export control?
    The Review Board reviews applications for export permits of cultural property that have been denied, and determines outstanding significance and national importance. Once this determination is made, the Review Board will either allow the export, or establish an export delay period. An export delay period provides Canadian institutions with an opportunity to acquire the cultural property before it leaves Canada.
  4. What is the advantage to an individual donor in having cultural property certified by the Review Board?
    Once cultural property has been certified by the Review Board, the donor is not required to report or pay tax on any arising capital gain, and is also eligible for a non-refundable tax credit. For additional information, please refer to the Canada Revenue Agency publication Gifts and Income Tax.
  5. What is the advantage to a vendor in having cultural property certified by the Review Board?
    When cultural property has been certified by the Review Board, a vendor is not required to report or pay tax on any arising capital gain. For additional information, please refer to the Canada Revenue Agency publication Gifts and Income Tax.
  6. What is the advantage to an artist in having cultural property certified by the Review Board?
    There are several possible tax-credit scenarios for artists. Details of these should be discussed with a financial advisor. For additional information, please refer to the Canada Revenue Agency publication Gifts and Income Tax.
  7. What is the advantage to a corporation in having cultural property certified by the Review Board?
    There are several possible tax-credit scenarios for corporations. Details of these should be discussed with a financial advisor. For additional information, please refer to the Canada Revenue Agency publication Gifts and Income Tax.
  8. Can cultural property be donated/sold to any charitable organization, and still remain eligible for a Cultural Property Income Tax Certificate (T871)?
    No. Only institutions designated by the Minister of Canadian Heritage as meeting recognized professional practices for the preservation and display of cultural property are eligible to apply for certification of cultural property on behalf of a donor or vendor.
  9. How many designated organizations are there?
    There are approximately 270 designated organizationsacross Canada.
  10. Does the Review Board purchase cultural property?
    No. The Review Board itself does not have a mandate to purchase cultural property. The Department of Canadian Heritage, however, can assist with the purchase of cultural property through the provision of Movable Cultural Property Grants.
  11. Must cultural property be Canadian in origin to be certified by the Review Board?
    No. Cultural property need not be Canadian in origin to be certified by the Review Board. The primary criterion is that cultural property must be of such outstanding significance and national importance that its loss to Canada would significantly diminish the national heritage. Further details can be found in Section 6 of the Certification Guide.
  12. Can a donor withdraw a donation from an institution once it has been certified by the Review Board?
    Once a legally binding deed has been signed, and the cultural property has been certified by the Review Board, a donation cannot be withdrawn without legal and financial repercussions. For additional information, please refer to the Income Tax Act, Part XI.2, Section 207.3.
  13. If a donor is not satisfied with the Review Board’s determination of fair market value, can the institution issue a charitable receipt for a higher value?
    No. Once the Review Board had made its determination of fair market value, that value will apply for a period of two years. The Review Board’s Advisory on Charitable Tax Receipts may be consulted.
  14. Can an institution loan certified cultural property to the original donor?
    No. Certified cultural property may not be loaned back to the original donor. Once certified, cultural property is to remain preserved and accessible in the recipient institution. For further information, please consult Section 3 of the Certification Guide.
  15. If a donation is made in a given calendar year, but is not certified until the following year, what are the consequences?
    For the purposes of taxation, a Cultural Property Income Tax Certificate (T871) issued by the Review Board applies to the year in which the donation was made, not the year in which the cultural property was certified. The Certificate can be applied not only to the year in which the cultural property is donated, but also to any of the five subsequent years. Further information can be found in the Canada Revenue Agency publication Gifts and Income Tax.
  16. What is a Tax Shelter Gifting Arrangement?
    Tax shelter gifting arrangements promote tax advantages for participants as a primary motivation for donating cultural property to Canadian institutions. Canada Revenue Agency has posted alerts online that stakeholders involved with cultural property should note. For purposes of administering the Income Tax Act and the Cultural Property Export and Import Act, information may be exchanged between Canada Revenue Agency and the Review Board.

    The Canadian Cultural Property Export Review Board encourages designated organizations, artists, donors and appraisers to exercise caution when presented with proposals to participate in tax shelter gifting arrangements for cultural property. All applicants for certification to the Review Board are asked to provide a tax shelter number if the cultural property is part of a tax shelter gifting arrangement.

    For more information available online, please contact the Canada Revenue Agency.

  17. What should I know about Charitable Tax Receipts?
    The Canadian Cultural Property Export Review Board encourages designated organizations and donors to exercise due diligence when issuing or making claims with charitable tax receipts under the Income Tax Act.
    1. When the Review Board determines the fair market value of cultural property, that value must be used by the donor in respect of any gift of that property for a period of two years from the date of the determination, whether the gift is claimed as a charitable gift, or as a gift of certified cultural property, and whether or not a Cultural Property Income Tax Receipt (T871) has been issued.
    2. When a designated organization withdraws its application from the certification process before the Review Board determines the fair market value, the recipient organization may issue a charitable tax receipt in respect of an irrevocable gift. The value indicated on the tax receipt must meet the definition of fair market value at the time the gift is made. A registered charity that issues a charitable tax receipt that includes incorrect or false information may be subject to penalties or other sanctions, including the revocation of its registered status under the Income Tax Act. A donor who claims a tax credit or deduction based on such a receipt may be subject to a reassessment by the Canada Revenue Agency under the Income Tax Act.
    For more information on the income tax implications, please contact the Canada Revenue Agency

    Applications for Certification

    1. Are there application deadlines?
      Yes. There are four application deadlines, which change each year.
    2. If an artist’s work has been previously certified by the Review Board, would other works by that artist be certified automatically?
      No. Each application for certification is reviewed on its own merit. It is the work of art that is certified, not the artist.
    3. If a fonds has been previously certified by the Review Board, would additions to the fonds be certified automatically?
      No. Each application for certification is reviewed on its own merit. The contents of a fonds are certified, not the creator.
    4. Must the donor provide the Review Board with documentation of purchase price?
      Following the February 2011 Review Board meeting, the purchase price requirement for applications for certification has been amended in response to points made by applicants. Information concerning the price paid for cultural property by the donor, while not an application requirement, may be useful to the Review Board in fulfilling its duties in determining fair market value when certifying cultural property. In those cases where the Review Board determines that purchase price is necessary for rendering fair market value determinations, it reserves the right to request this information at any time. For further details, please refer to Section 8 of the Certification Guide.
    5. Will the Review Board base its determination of fair market value solely on purchase price?
      No. The purchase price is only one of many factors which are considered in the determination of fair market value.
    6. Must the cultural property meet all five criteria for “outstanding significance” in order to be certified by the Review Board?
      No. Only one or more of the criteria must be met for an object to be certified.
    7. Must the cultural property be of “national importance” to be certified?
      Yes. National importance must be demonstrated and includes local, regional and provincial factors. For further information on the factors that go into a determination of national importance, please consult Section 6 of the Certification Guide.

    Monetary Appraisals

    1. Is it possible to obtain a list of qualified appraisers?
      The Movable Cultural Property Program does not endorse appraisers for the purposes of certification. Potential applicants are advised to consult professional associations of appraisers and advisors for further advice and direction.
    2. Is it the responsibility of the institution to provide an appraiser (or appraisers if the cultural property is valued over $20,000) with the necessary documentation required to conduct a monetary appraisal?
      Yes. Detailed information must be provided to the appraiser(s) by the institution before an appraisal begins. For further information, please consult Section 8 of the Certification Guide.
    3. Is the institution accountable for ensuring that appraisals include all information required by the Review Board?
      Yes. If an appraisal does not meet the Review Board’s requirements, as outlined in the Certification Guide, the applications will be returned to the applicant. For further information, please consult Section 8 of the Certification Guide.
    4. Are appraisals solicited by the donor eligible for consideration?
      Yes provided that they have been conducted at arm’s length and are complete. Further information on appraisals can be found in Section 8 of the Certification Guide.
    5. What is the role of the institution if there is a discrepancy in estimated fair market values among appraisers?
      Applicants must address any such discrepancy in a written statement, and provide arguments to support either an average of the estimated values, or one of the individual values.