Asking for permission to accumulate property (funds)
Notice to reader
As a result of Budget 2010, the information below applies only for fiscal periods ending on or after March 4, 2010. If the charity's fiscal period-end was before March 4, 2010, see Asking for permission to accumulate property (funds) - prior to Budget 2010.
Permission to accumulate funds helps a registered charity to temporarily accumulate funds in order to make a major expenditure, such as buying a building or a costly piece of equipment, which cannot be financed out of its current revenue without the charity incurring a spending shortfall (not meeting its disbursement quota).
The amount approved for accumulation, and the income earned on the amount, is excluded from the charity's annual spending requirement.
To ask for permission, send a letter with the following information:
- the specific purpose for which the funds will be used;
- the amount required;
- the length of time needed to accumulate the funds (minimum 3 years and maximum 10 years);
- the signature of a director/trustee or other authorized representative of the charity;
- the name and the registration number of the charity; and
- the effective date (starting date).
Mail or fax the letter to:
Canada Revenue Agency
Ottawa ON K1A 0L5
Confirmation letter (terms and conditions)
If approved, the charity will receive a letter confirming the amount that can be accumulated, the specific purpose for which the approval was granted, and the number of years for which the accumulation can continue.
The funds accumulated for a fiscal period, including any income earned on the accumulated amount, should be reported on line 5500 of the T3010 return. Accumulated funds spent for a fiscal period should be reported on line 5510.
Unused accumulated amount
If a charity fails to meet the terms and conditions of the permission to accumulate or if circumstances change and the accumulation must be abandoned, the unused accumulated amount and any income earned on the accumulated amount must be included in the calculation of the charity's disbursement quota for that year. The unused accumulated amount must be included as property not currently used in charitable activities or administration to calculate the amount to report on line 5900.
If the charity needs more time to accumulate funds or wants to change the approved amount, it must apply in writing to the Charities Directorate.
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