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Glossary

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Nora Layard


Adjusted cost base. The original cost of property adjusted in accordance with the provisions of the Income Tax Act.

Alter-ego trust. A trust where the settlor (person transferring property into the trust) acts as trustee and receives income (as beneficiary) from the trust while alive.

Annuity. A contracted right to receive payments of a specific amount at stated intervals for life, or for a term of years, in consideration of a transfer of cash or other assets.

Beneficiary. A person entitled to benefit, especially under a trust or will.

Bequest. A gift made to someone in a will.

Capital. With reference to a trust, the principal upon which income is earned. Also called corpus.

Capital cost allowance. A prescribed amount claimed on depreciable property that is acquired for the purpose of producing income and deducted from income from a business or property. Effectively, it allocates the cost of assets over the useful life of the asset.

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Jonathan Grant

Capital gain. A gain arising on the disposition of capital property calculated by subtracting the adjusted cost base of capital property plus the cost of disposing of the property from the value of the property at the time of its disposition.

Capital loss. A loss arising on the disposition of capital property; generally, the excess of the adjusted cost base over the proceeds of disposition of the property, less the costs associated with disposing of the property.

Capital property. Generally, depreciable property and property in relation to which a gain or loss on disposition of the property would be a capital gain or a capital loss. Capital property may be any kind of property but does not include inventory of a business.

CRA. Canada Revenue Agency.

Certified cultural property. An artwork, artifact, or structure that, if approved by the Canadian Cultural Property Export Review Board, qualifies for special tax treatment when donated to a qualified charity.

Charge on land. In the Land Title Act, an estate or interest in land less than the fee simple. Includes encumbrances such as judgments, mortgages, and liens. Charges may be registered against title to land in the Land Title Office.

Charitable donations. A gift, for the purposes of the Income Tax Act, is a voluntary transfer of property by a donor to a registered charity without consideration. The transfer must be voluntary.

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Gary Tipper

Charitable remainder trust. An irrevocable trust that pays income to one or more individual beneficiaries for life or a term of years, and then distributes the remaining assets to one or more charities.

Conservation covenant. A voluntary, written agreement registrable against title to land under section 219 of the Land Title Act made between a landowner and a covenant holder covering all or part of a parcel of property in which the landowner promises to protect the land as provided in the covenant.

Covenant. In real property law, a promise made by a landowner, the covenantor, to another, the covenantee, to do, or not do, something in relation to his or her land.  Such promises take the form of voluntary, written agreements.  See also "restrictive covenant", "easement" and "servitude".

Covenant holder. Also covenantee. A person for the benefit of whom a covenant is made.

Crown. The formal head of state of Canada.  Commonly refers to the federal or provincial government, and may include municipal government and/or their agencies.

Crown land. Land owned by the Crown. Also known as public land.  Crown land may be held by either the federal or provincial government.

Deem. To hold, consider, or treat as if.

Deferred gift. Any charitable gift arrangement where the charity's use of the asset is delayed to some future time.

Depreciable property. Property acquired for the purpose of gaining or producing income in relation to which a taxpayer can claim capital cost allowance. The Income Tax Act prescribes the kind of property against which capital cost allowance can be claimed. Land is not depreciable property.

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David Denning

Designation. Authorization by the Minister of Water, Land and Air Protection of an individual or organization to hold a conservation covenant or a statutory right of way. Designation may be general designation or individual.

Disbursement quota: (update). The new federal budget 2010 calls to elliminate the Disbursement quota. Formerly the minimum amount of a charity's income that is to be applied to its charitable purposes.

Dominant tenement. Land that receives the benefit of a covenant or easement over another property.

Donor. A person, foundation, or corporation that makes a gift.

Easement. A right of use attached to land over nearby or adjacent property of another. The land having the right of use attached is known as the dominant tenement and the land subject to the easement is known as the servient tenement. Often used to provide access to one parcel of land over another. In Quebec, this is known as a "Servitude".

Ecological gift. A gift of land or a covenant or easement on land that is certified as ecologically sensitive by the federal Minister of the Environment or his or her designate in accordance with the provisions of the federal Income Tax Act and otherwise meets the requirements of the Income Tax Act and that gives rise to special tax benefits.

Endowment. A principal sum, permanently set aside and invested by a charity, with only the income used for charitable purposes.

Estate. (1) An interest in land. (2) All the property that a person had the power to dispose of by will.

Fee simple. The estate in fee simple is the largest estate or interest in land known in law and is the most absolute in terms of the rights that it confers. The largest possible bundle of ownership rights in a piece of land including the right to exclusive possession of the land, the right to use the land, and the right to dispose of the land.

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David Denning

Gift. A transfer of property without consideration, that is, without the expectation of any benefit, advantage, right or privilege in return.

Income Tax Act. Federal legislation, administered by Canada Customs and Revenue Agency (CCRA).

Interest in land. A right to have the advantage from something. One or more of the ownership rights of land. A conservation covenant or an easement is an interest in land. See also "estate".

Inventory. Items bought for use or resale by a business, relevant in calculating profit from a business.

Life estate or life interest. A grant of property to a person for his or her life or some other specified time.

Loan back. An arrangement where a donor gives cash to a charity (usually a private foundation) and the foundation then loans the money back to the donor's corporation. The loan is backed by corporate assets and pays interest. 

Market value. The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

Monitoring. Actions carried out to measure and record change on land upon which a covenant has been placed, determine the effectiveness of the covenant to protect the land and ensure compliance with the terms of the covenant.

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Jonathan Grant

Net income. Total income less certain allowable deductions such as RRSP contributions and child care expenses.

Present gift. A gift that is available for the charity to use now. Also called an outright or current gift.

Principal residence. Under the Income Tax Act, a housing unit, leasehold interest in a housing unit or share of the capital stock of a co-operative housing corporation acquired for the sole purpose of acquiring the right to inhabit a housing unit owned by the corporation that is owned and ordinarily inhabited in the year by a taxpayer, the taxpayer's spouse or child.

Private foundation. A charitable foundation that is not a "public foundation." Typically a private foundation receives most of its funds from a single source, its directors do not deal at arm's length with each other, and it makes grants to registered charities.

Private land. Land owned by private individuals or corporations rather than the Crown.

Property. Under the Income Tax Act, property of any kind whatever, whether real or personal, including a right of any kind, a share of the capital stock of a corporation and the work in progress of a business that is a profession.

Property tax. A tax levied on real property by either the province or a local government based on the assessed value of the property, generally market value.

Property transfer tax. A tax payable under the Property Transfer Tax Act on the transfer of an interest in real property by the person acquiring the interest.

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Gary Tipper

Public charity. A charity other than a private foundation. 

Public foundation. A charitable foundation where more than 50% of the directors, trustees, officers or like officials deal with each other at arm's length and not more than 50% of the capital contributed or otherwise paid in to the foundation has been contributed or paid in by one person or members of a group of persons who do not deal with each other at arm's length.

Publicly traded securities. Publicly traded securities include stocks, bonds and mutual funds containing stocks listed on approved stock exchanges.

Qualified recipients. Under the Income Tax Act, registered charities, Canadian municipalities, the United Nations or its agencies, the federal or provincial Crown.

Real property. Land or an interest in land such as an easement or covenant.

Registered charity. Under the Income Tax Act, a charitable organization, private foundation or public foundation, all as defined in the Income Tax Act, resident in Canada and created or established in Canada, that is registered as such.

Re-insured gift annuity. A charitable gift annuity where the charity uses a portion of the contribution to purchase an annuity from an insurance company that will pay the amount promised to the annuitant(s). The portion of the contribution not used to purchase the annuity can be retained and used by the charity. Also called "gift plus annuity".

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Nora Layard

Remainder or residual interest. A right to enjoy or own property in the future after the termination of all life interest or estates.

Rent charge. A charge, registered RENT CHARGE. A charge, registered against title to land, securing payment of a specific amount by the landowner to the covenant holder for each breach by the landowner of the terms of the covenant. 

Restrictive covenant. An agreement between two landowners restricting the use of one property for the benefit of the other.

Self-insured gift annuity. A charitable gift annuity where the charity invests the contributed property and assumes the obligation to make payments to annuitant(s).

Servient tenement. Land over which a burden such as an easement or covenant has been granted in favour of another parcel of land.

Servitude. In Quebec law, a servitude is a right to use another's land. It is a burden on the land requiring the owner to permit access to the beneficiary of the servitude.

Statutory right of way. An easement without a designated dominant tenement registrable against title to land under section 218 of the Land Title Act.

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David Denning

Strip bond. A strip bond (also called a "zero-coupon bond") is a corporate or government bond that pays no current interest to the holder. It is sold at a discount for considerably less than its future redemption value.

Tax credit. An amount calculated under the Income Tax Act which is subtracted from tax otherwise owing.

Taxable income. Net income less certain allowable deductions such as capital losses and capital gains deductions.

Term insurance. Life insurance written for a specific period that pays a death benefit if the insured dies within that period.

Testamentary gift. A gift that takes effect upon the donor's death. For example, a gift in the donor's will.

Title. The legal right to the possession of property, especially real property, or the evidence of the right such as title deeds.

Trust. The relationship that arises when one person, the trustee, holds property for the benefit of another person, the beneficiary, or for some object or purpose permitted by law, in such a way that the benefit of the property goes not to the trustee but to the beneficiary or other objects of the trust.

Voluntary. Actions taken exercising free will, without compulsion, without legal obligation, without expectation of return or profit.

Without consideration. No expectation by the donor of right, material benefit or advantage. No promise of something in return.

 

 

 

 

 

 

 

 

 

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