TRC

Hi all,

My parents back in the UK are sending money as a one off. Which is approximately $15k, I was going to transfer it into my UK bank then use Forex to transfer.

I just wanted to confirm this is perfectly fine to do I don't believe I need to declare it at all?

Thanks

JonboyE

There is no tax on gifts in Canada. Try to keep some sort of documentary evidence of where the money came from in the very unlikely event you need to prove it was a gift.

Steve_

There's no tax, it's a gift. Where it gets dicey is if they periodically give you money.

I always think it's a bit weird because if they give you the money and the money stays in the UK, the only way they know about it is if you have to file T1135. Supposedly the CRA gets notified of every transfer into Canada of more than $10,000 by FINTRAC but imx they don't seem to have a clue.

I discovered recently that the CRA has regularly lost my T1135 in internal mail and during that conversation I asked the agent what access she had to FINTRAC, apparently it is very limited access the CRA have. Basically only during formal investigations.

I suppose if they really really wanted to under the tax treaty they can go poking around looking for foreign bank accounts but I think it happens very rarely indeed.

I suspect my T1135s are in the same place at the CRA as those KPMG e-mails.

Johnboyuk

This is what the UK tax authorities dictate about giving money away in relation to inheritance tax:

https://www.gov.uk/inheritance-tax/gifts

Steve_

Yeah that applies to the giver, not the recipient. I have wondered in the past how HMRC would go about getting the tax if you have no ties to the UK.

Say a rich relative dies and gives you a few million a year before they die, then they owe a significant tax liability to HMRC. So there isn't enough money in the estate left to pay the bill. Then what?

You're Canadian, you live in Canada, you have no assets in the UK and Canada has no estate tax treaty with the UK.

Isn't the UK just stuffed at that point?

Johnboyuk

Most likely, like you say, as long as you are completely divested from the UK, i.e. no UK bank account, property, etc.

Almost Canadian

It's called tracing and, as long as the assets still exist, or can be traced, it is relatively easy.

Steve_

But there's no legal authority in tax law where they can go after them. There's no estate tax treaty with the UK. Estate tax treaties are a rare beast, the UK only has a few, I think half a dozen and Canada never bothered as it doesn't have such a tax.

So of course they might be able to identify your assets in Canada, but so what? If you've got no assets in the UK, the estate has given you all the assets and they're no longer in a jurisdiction with a reciprocal treaty, what can HMRC do?

Bugger all as far as I can tell. Plus as a British citizen you have a right of entry to the UK, you haven't got the assets on you, so even if you visited the UK they would be powerless. They can serve you, but it's unenforceable.

I seem to recall this actually came up in the press a really long time ago, I remember reading about it, it forced HMRC to agree a treaty with some country to get at their assets.

Almost Canadian

The estate owes the tax in the UK so, if there are no other assets in the UK that HMRC can go against, they may elect to pursue assets in another jurisdiction.

It goes like this: They obtain a judgment against the estate in the UK. They take the UK judgment and use that to obtain a similar judgment in the jurisdiction in which the assets are held. Once they obtain that judgment, they enforce it against the holder of the assets. They do so by tracing the original asset through to an asset that now exists

It's easy. I know it's easy as I used to do it all the time when I was a solicitor in England. I didn't work for HMRC but I don't doubt for a minute that is it possible, failing which every person would be able to avoid UK tax by moving their assets outside of the UK's jurisdiction.

TRC

Sorry to bump this thread again, and thanks for the replies so far.

Very similar question to before, but I am getting married soon, and some people have sent me money to my UK account as a gift (I keep open for when I'm visiting the UK and paying my student loan)

I'll transfer this sum through Forex to my canadian account shared with my wife to be, this should be fine?

Thanks

PMM

Hi


1. Yes