Rent-Free Accommodation Is Not A Charitable Gift

In Carson v. The Queen,a husband and wife allowed a registered charity, in which the wife was a president, to use two rooms in their house rent-free.  In a judgment rendered on November 1, 2013, the Tax Court of Canada held that the husband could not claim a charitable donation credit with respect to the rental value of the two rooms.  In so holding, the Tax Court found, among other things, that the rental arrangement was "far too loose" to conclude there had been a gift by the husband. 

The Tax Court's decision is consistent with the CRA's historical administrative position that since no property is transferred when a landlord provides rent-free accommodation to a charity, there cannot be a gift, which requires that there be a voluntary transfer of property.  However, the CRA has accepted that, as is the case with services, there is nothing to stop a landlord from donating cash rent received from a charity tenant, for which the landlord would be entitled to receive