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Ask the Expert

Jeanne Krahn-Matthewson

February 27th, 2013 by
 

Q: I understand there is no gift tax in Canada. My mother from overseas wants to give me a large monetary gift. She would either send it to me through a bank transfer or deposit it into my bank account in my home country. Will it matter in terms of taxes if the money was deposited into my overseas account? And if my mother was to send it here, is there a form we would fill out to prove it is a gift? Will I have to declare the gift to CRA?

Asked by Anonymous, Calgary

 

Under Canadian tax law, gifts are not taxable. The definition of a gift is “something imparted for no consideration”. 

There is no form to fill out to prove a transfer of funds is a gift. I would suggest that you have your mother sign a statement outlining the amount and that it is a gift. Make sure the statement is dated. Keep the statement with your tax records in case Canada Revenue ever questions the amount.

If the funds are not put into a Canadian bank account, then you may have to disclose to the Canadian government the amount of your foreign assets.  An individual is required to file a T1135 with their tax return if the cost of total foreign assets owned by the individual is $100,000 or more. This includes funds held in non-Canadian bank accounts.

 
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