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Canada Tax
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Cash gifts for Canadian tax purposes.

My parents sold their house...

My parents sold their house overseas and wants to move to Canada as permanent residents (this is their only property for personal use in Hong Kong). They wants to transfer the money into my bank account in Canada and wants me to use the money as down payment to purchase a property in Canada. My questions are: (1) Do my parents need to pay tax in Canada? (2) Do I have to report the cash as gifts from my parents for tax purposes? is this cash gift taxable in Canada?


 


The concerned amount is around Canadian dollars $350,000 to $400,000.

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Answered in 2 hours by:
3/25/2013
Legal Ease
Legal Ease, Lawyer
Category: Canada Tax
Satisfied Customers: 102,592
Experience: Lawyer
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Thank you for your question.

Before I begin I want to explain a bit about how the site works.

It may be that I will find that I need to gather further information from you. As well, it's quite possible that you may feel the need to ask me additional questions for further clarification.Please do not worry that you will be charged additionally if I ask you questions or if you need to ask me questions. That is not at all how the site works.

As well, please understand that as a careful lawyer I will always give you an honest answer even if the answer is sometimes not what you were hoping for.

Finally, as we go through the process please do not feel rushed if I ask you a question. You are always free to take your time to gather more information before you post back. As well, please understand that even after you rate me the post will not lock and you could always come back for further clarification if you think of something a bit later on down the road.

Gifts are not taxed in Canada.

So you don't need to report this gift.

Your parents do not have to pay tax in Canada (assuming they are not earning income of any sort from Canada) until they become residents in Canada.

Once they do then they need to report and pay tax on their income world-wide.

But they will not face double taxation because they will receive a foreign tax credit for any tax paid abroad.

Let me know if you need further clarification.
Legal Ease
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Category: Canada Tax
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Thanks very much for the rating.

Please take the time to participate in the customer satisfaction survey as that will go into my record with the site.You will be sent an email with the survey in a couple of days.

And feel free to keep my name in case you need me again down the road. You can always put my name into the subject line the next time you post so that your question will stand out for me and I will answer it just as soon as I can.

Thanks and take good care!

Ask Your Own Canada Tax Question
Customer reply replied 4 years ago


Hi Debra


 


First of all, thanks for your advice and you deserve that rating. I will keep your name and will get back to you if I require further assistance from you regarding any Canadian tax issues.


 


Thanks & kind regards


Daniel

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