Inheritance Tax?

webcite_99 · Post by **webcite_99** » Sat Jul 30, 2005 4:37 pm

If a Canadian tax resident (who is a U.S. citizen) inherits a sizeable amount of money from a deceased parent, who at all times (including the time of death) was a U.S. citizen and U.S. resident, are there any Canadian tax implications to the inheriting Canadian tax resident child?

Does this answer change if the Canadian tax resident at some point prior to the inheritance became a dual citizen?

I appreciate the help.

nelsona · Post by **nelsona** » Sat Jul 30, 2005 10:19 pm

Cdn citizenship has no bearing on Cdn taxation, so whether the US citizen became a Cdn citizen or not is of no importance.

There is no inheritance tax in either US or Canada.

There is ESTATE tax for deceased US citizens (not the inheritors), regardless of where they live, and there is deemed disposition of property upon death of Cdn residents, and Cdn taxable property.

<i>nelsona non grata... and non pro</i>

webcite_99 · Post by **webcite_99** » Sat Jul 30, 2005 10:36 pm

So that I'm clear: in this scenario, the Canadian tax resident would not pay a penny of taxes to the Canadian government (from any gift or bequest), and the US citizen's estate would be liable only to the US government for any taxes on the estate?

Also, I read that the NDP has been recently advocating Canadian estate taxes and gist taxes. Do you anticipate that the Canadian government will implement a tax scheme that would tax estates or gifts in the near future (I'm not asking you to predict the future, only what your sense based upon your expertise and experience with the CRA)

Thanks again

Rick

nelsona · Post by **nelsona** » Sun Jul 31, 2005 10:31 am

Canada used to have an estate tax, and got rid of it in favour of cap gains tax and deemed dispo on death.

I wouldn't worry about the NDP, since minority gov'ts in which they wield power come around every 30 years or so -- and are short-lived

<i>nelsona non grata... and non pro</i>