Do I pay Canadian tax on money my parents gifted from abroad?
Receiving a gift is not, in itself, a taxable event in Canada. What the Canada Revenue Agency is interested in is whether the money is really a gift, where it originates, and what it does once it is yours. So the work is evidential rather than computational: a letter from the giver, the banking trail, and a clear account of the relationship. Income that the gifted money later earns is yours and taxable here, and if what you received is a foreign asset rather than cash it may enter your foreign-property reporting. Gather the documentation at the time of the transfer. Producing it years later, when a deposit is queried, is much harder.
If I gift shares to my son overseas, do I owe tax?
Possibly, and this is the part that catches people. Canada does not tax the gift, but it can tax the disposition behind it. Giving away appreciated property is generally treated as though you had disposed of it, so the accrued gain can crystallise on you even though your son pays nothing and receives the shares tax-free in his own country. The person with the tax bill is therefore the one who feels he has received nothing. Before transferring anything with a gain in it, work out the deemed disposition first, then decide whether to give the asset, sell it and give the proceeds, or wait.
Which country taxes a cross-border gift, the giver's or the receiver's?
There is no single answer, and that is the practical problem. Some countries impose the tax on the person making the gift, some on the person receiving it, and Canada generally taxes neither, while still taxing the disposition that sits underneath the transfer. So a gift between two countries can be taxed once, twice, or not at all, depending on the pair. Treaty relief for gift taxes is also far less developed than it is for income tax. Map both sides before the transfer: the order of events, and which spouse or which entity makes the gift, often decides the outcome more than the amount does.
Does gifting income-producing property to my spouse move the tax?
Usually not, at least not while you are both alive and together. Attribution rules exist precisely to stop income and gains being moved to a lower-taxed family member by transferring the asset, so the income can continue to be taxed in the giver's hands after the property has changed ownership. The result is a transfer with real legal effect and no tax effect, which is the worst of both. Where one spouse is resident in another country the interaction becomes more delicate still, because that country may well tax the recipient on the same income. Test the attribution position before the asset moves.
Do I have to report a large gift received from overseas?
It depends on what arrived rather than on how much. Cash gifted into a Canadian account is not income and is not reported as income, though the receipt may well be asked about by your bank or by the Canada Revenue Agency, and you should be able to evidence it. If what you received is a foreign asset, such as property abroad, shares in a foreign company or an interest in a structure, then you now hold foreign property and your own reporting obligations start from the date of the gift. People report the income and forget the holding. The holding is usually the one with the penalty attached.
Is it better to gift property now or leave it in my will?
They are different transactions with different consequences, and the honest answer is that it depends on which side of which border the tax sits. A lifetime gift of appreciated property can crystallise the gain now, on you, and start the recipient's ownership from a new position. Leaving it instead defers that question to your death, where a different set of rules, and possibly another country's estate tax, applies. Attribution, the recipient's residence and the location of the asset all shift the balance. What does not work is making the transfer and asking the question afterwards, because a completed gift is difficult to unwind.
What happens when a non-resident sells Canadian property?
The buyer or their solicitor is obliged to withhold on the purchase price unless you obtain a clearance certificate, so the practical work happens before closing rather than after. The certificate application reports the disposition and the gain and fixes the amount the authority requires to be held. Apply late and the withholding is computed on the gross price, tying up cash until a return recovers it. See the section 116 clearance certificate.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
