What is a Donee?

Introduction:

The economic situation of a country is usually based on the poverty line and the percentage of people above the poverty line. Being one of the Developed countries, Canada has a higher percentage of people above the poverty line. There are a very less number of people who are below the poverty line in that country. The people, since they have a larger income and their intentions are really good, donate a great amount to charity. This process of donation is done by almost all the Canadian citizens in favor of their needy and poor. The person or the charitable trust or organization which gets these donations is known as donee.

Donators and Donee:

Canada has a very high percentage of people who donate to charitable organizations when compared to the other countries. These people donate not only materials but also money for international charitable organizations. Recognizing their spirit of charity the government of Canada has exempted the tax on these gifts from the donators to the donee. The donations are usually money but at times they might include provisions and even medical materials to war torn countries. The Canadian Government has exempted all these from tax as a form of income.

Canadian Regulations on the Donee:

The materials received from the donators by the donee are tax free, both for the donator and the donee. The Income tax act has clauses for provisioning these and they are also enabled for non monetary items. For example the clause 3 of the income tax act of Canada specifies that all the medical items that are to be distributed to the people who are in need of them both inside and outside the country free of tax. These medicinal items are to be properly handled by the donee and distributed to the respective intended persons.

The regulation also states that however even if the amount given to a charitable organization is tax free, it has to be declared when filing the income tax returns. Only then this would be considered for tax deductions. Also the donee has to declare the amount he received as a gift and file the income tax returns for tax deductions. One more regulation for the gifting of properties inside the country of Canada is that the donor should properly documented about the previous ownership of the property. The gifter or the donator may be a non resident too, but there should be documentation supporting the ownership of the property in Canada. The gift should be made to a prescribed donee, and the donee should properly acknowledge the receipt of the property and put the property to use in the recommended manner.

Conclusion:

In conclusion of the regulations in Canada about the gifting of materials, it is to be noted that the donee term also refers to a benefactor of a life insurance of a person. Since most of the life insurance’s purpose is to provide the benefactors of the insurance with money when the person passes away, this comes under the region of gift income and hence non taxable income to a person.