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  1. #1
    Expert Forum User The Ultimate London Mom!
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    Default Transferring money from another country

    My folks live outside Canada and are making plans already to have everything organized before they pass. My siblings are in the same country, but I'm here. So the idea is to leave them each their portion of the inheritance right in that country, but to somehow send me mine. Their idea was to do wire transfers to an account I would set up here in Canada, and then would transfer chunks of money until they reach my fraction of the inheritance (and if they need access to that money, obviously they can get it back, otherwise it stays untouched until they pass). But we don't know if this can be done, is it legal? will i pay taxes on this money? will i get in any trouble? will Canada contact the country of origin and demand details on the money? (this is a 3rd world country where the government basically can do whatever it wants and everyone tries to get their money out to make it safe).
    Any advice would be appreciated, thanks!

  2. #2
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    Hi Anon,

    I can't comment at all on the impact to your parents without knowing which country they live in but it's uncommon for any country to be happy with it's tax residents not declaring the sale of assets to generate cash.

    Having said that, in terms of you and Canada, the original money you receive here in a bank account would not be subject to tax if it's a gift from your parents. The income this money earns (like interest etc) WOULD be subject to tax in your hands here and the bank would issue you some type of slip (like a T5 or T3) with the amounts each year. How much this is depends on whether the bank pays interest on the account or where you invest the cash. The inheritance a person receives (or even loan amounts) are never taxable in Canada - only the income these amounts earn.

    The only other thing to consider would be the size of transfers may result in the bank asking more questions (security stuff where deposits exceed a certain value). It's not illegal to give your children (or anyone else for that matter) money - but if Canada has a tax treaty or information agreement with this other country then they may disclose this info to them. It's really a risk your parents are assuming by not disclosing their activities as may be required to their home tax country.

    Hope this helps - please let me know if you have any other questions.

    thanks!

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    You'd have to have a executor actually send you a check or transfer with your amount. My DH's mom died a couple years ago and has his inheritance sitting in a bank account in the country he comes from and has to actually go in in person and sign for it. He's called the bank a dozen of time and they won't transfer it. If they would have had an executor this never would have happened but they probably didn't think of it.

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    Expert Forum User The Ultimate London Mom!
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    Thanks for your help, and I know it's hard to understand why people would take their money out of their country like that, but things happen there that are absolutely unbelievable and everything is so corrupted that you're on your own.

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    You're so correct MomLiz about the banks being nervous about transfering money without an executor. An executor is an official designate of the Estate monies and responsible for ensuring the Will is administered according to the wishes of the deceased. Without one, the bank has no way of knowing with legal certainty that the proposed beneficiary is actually entitled and further that there aren't any other creditor's with priority (like governments for taxes). Banks hate risk and won't do anything without assurances!

    A Will is SOOOOOOO important and makes the process of administering an estate SOOOOOOOO much easier!!!

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    Hi again ANON - it sounds like a difficult situation your family faces and I hope everything works out the way everyone wants.

    Don't hesitate to let me know if you have any other questions.

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