QUESTION: If you inheritate a large amount of money from a deceased parent,
and it is given to you over the period of years and then you are given a
large lump sum when you become the age of thirty, how much would a person
lose in taxes? And when would you have to pay it, when you received it or
the year after?
Thank you for your time.
=======================
david ingram replies:
Canada does not have an inheritances or estate tax.
Any taxes on the principal of the inheritance should have been paid with the
deceased's final tax return.
If the corpus or body or principal of the estate was now left in a trust to
be spit out at a beneficiary's 30th birthday, the estate would pay tax on a
form T3 each year unless it disbursed the earnings to the beneficiary which
sounds like what happened here.
The estate would issue a T3 slip to the beneficiary telling the beneficiary
how much interest, dividends, and / or capital gains the beneficiary had
received and the beneficiary would report interest and dividends on schedule
3 and use schedule 4 if there were capital gains.
If and when the lump sum, was paid out, it is unlikely that there would be
any tax at that time because it would be a tax paid amount.
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