Split receipting, the 80% threshold and the de minimis rule
Updated
Split receipting is the CRA's method for working out the eligible amount of a gift when the donor received something in return. This page summarizes the CRA's page Split receipting (opens in a new tab). It is not tax or legal advice. If your case is unclear, check the CRA page or ask a professional.
To use the form, see Gift with advantage receipts.
The eligible amount
The CRA says to subtract the fair market value (FMV) of the advantage from the FMV of the gift. The result is the eligible amount, and it is what the receipt can be issued for. The charity must be able to come up with an accurate figure for the FMV of the advantage. If it cannot determine that value, the CRA says a receipt cannot be issued (Determining fair market value (opens in a new tab)).
In the CRA's example, a donor gives $100 and gets an art exhibit ticket worth $50. Applying the rule, the eligible amount is $50.
The 80% threshold (intention to make a gift)
When the FMV of the advantage is more than 80% of the FMV of the gift, the CRA generally considers that there is no true intention to make a gift, so the charity cannot issue a receipt.
In the CRA's example, a $100 gift with a $50 advantage is under the $80 threshold, so a receipt can be issued. With an advantage of $81 or more, it could not.
The CRA adds that, rarely, the threshold is not met but there was a clear intention to make a gift. In that case the donor must be able to prove it to the CRA. That is outside what FreeCharityReceipts handles.
The de minimis rule
The CRA treats some advantages as too small to matter. If the combined FMV of the advantages is not more than $75 or 10% of the FMV of the gift, whichever is less, the charity does not have to subtract them when it issues the receipt.
In the CRA's example, a $100 gift with a $6 mug and a $2 pen has advantages of $8, under the $10 limit. They need not be subtracted. At $11 or more they must be.
The rule does not apply to:
- cash or near-cash equivalents, such as redeemable gift certificates, vouchers and coupons
- the object of a fundraising event, such as the meal at a fundraising dinner
For those, the CRA says the charity must always subtract the value.
What the form checks
| Rule | What FreeCharityReceipts does |
|---|---|
| Eligible amount | Works it out as Gift Amount ($) minus Value of Advantage Received ($) and prints it as Eligible amount. |
| 80% threshold | Blocks the receipt when the advantage is more than 80% of the gift, with the message "CRA prohibits tax receipts when the advantage exceeds 80% of the gift amount". An advantage of exactly 80% is allowed. |
| De minimis rule | Not applied. The form always subtracts the advantage you enter. |
| Cash, near-cash and event exclusions | Not checked. |
| Accuracy of the advantage value | Not checked. The value is yours to determine and to be able to support. |
If you think your advantages fall under the de minimis rule, deciding what to do is up to you. Check the CRA page above or ask a professional.
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