What happens if Form 706-NA was never filed for US property?
The obligation does not lapse because it was missed. The return is prepared for the date of death whenever the omission is discovered, which means valuations have to be established as at that date rather than today. Exposure on a filing of this kind is charged by reference to the form and the delay rather than to the tax finally payable, so an estate that owes nothing can still have a problem, and an estate that would have qualified for treaty relief can find that relief harder to evidence. The practical sequence is the same as for a return filed on time, with one extra step: establishing and documenting why the filing is late.
Can we still claim treaty relief on a late Form 706-NA?
Relief that a treaty provides is claimed on the return, so a return that was never filed is a claim that was never made. Filing late is how the claim gets made. What suffers is the evidence: the relief available to a Canadian estate is worked out by reference to the proportion of the estate situated in the United States, and that proportion has to be built from the worldwide estate and the US-situs assets as at the date of death. Brokerage records, property valuations and probate papers are all easier to obtain in the year of death than several years afterwards. Start with what can still be obtained, and note what cannot.
Does a late Form 706-NA matter if no estate tax is due?
Yes, and this is the part executors find hardest to accept. The obligation turns on the facts of the estate rather than the tax, and exposure for a late filing is not calculated as a share of a tax bill, so a nil position is no answer to the delay. There is also a practical consequence. The unfiled return is often what stands between the beneficiaries and the US assets, because the people handling a transfer or a sale want the estate's position settled first. A nil return that exists is useful. A nil position that was never filed is only an assertion.
How do we value US assets years after a death for Form 706-NA?
Working backwards. Publicly traded shares can normally be established from market records for the date of death, and a brokerage will usually produce a statement for the period even long afterwards. Real estate is the harder one: a present-day appraisal answers the wrong question, so a valuer is instructed to opine as at the date of death on the evidence available from that time. Keep the workings and the instructions given to the valuer, because a late return attracts more questions about how a figure was reached than a timely one does. The worldwide estate figure needs the same treatment, since the US proportion is measured against it.
Can we sell the US house before Form 706-NA is filed?
That is rarely the executor's decision alone. The parties handling a sale or transfer of US property commonly want the estate's filing position resolved before anything moves, and an unfiled return leaves them with nothing to rely on. The result is an estate that cannot be distributed for reasons that have nothing to do with tax being owed. Where a sale is already in motion the order of work matters: establish the date-of-death valuation first, because it is needed both for the estate return and for the gain on the later sale, and one well-supported valuation serves both rather than two that disagree.
Who is responsible when an executor files Form 706-NA late?
The estate carries the filing and the executor administers it, so questions about a late return come back to whoever is acting. That is so even where the delay was inherited — an executor appointed after an earlier one stood down still faces the unfiled return. Two things help. First, a written chronology of when the estate learned what, prepared from the file rather than from memory. Second, a complete filing rather than a partial one, since a return that raises more questions than it answers extends the period the estate stays open. Where several executors are acting, agree who signs and who assembles the records before any of it starts.
How do I get back tax withheld in another country?
By the route that country provides, and it is rarely automatic. Where an elective return is available — on rent or pension income, for instance — filing it recomputes the tax on net income and refunds the difference. Where it is not, you file a refund claim with the withholding authority, supported by evidence of your residence and entitlement to the treaty rate. Both take time, which is why fixing the rate before payment is worth more. See withholding refund and recovery.
Is a gift from abroad taxable in Canada?
Not to the person receiving it — Canada does not tax gifts in the recipient's hands, whatever the amount. The tax questions sit elsewhere. A gift of property rather than cash is a disposition for the giver, at market value. Attribution rules can send the income the gift later earns back to the giver where the recipient is a spouse or a minor. And a gift large enough to be noticed should be documented, because "it was a gift" is a claim that gets tested. See a Canadian receiving a foreign gift.
