QUESTION: My son in law has a Trust Acct and or Bond that was opened for him
when he was born. The Bond is held in a Financial Institute in Nowway where
it was opened by his parents in 1956. It matures this year when he turns 50
yrs of age. What happens when he brings the money into Canada? Does he pay
income tax on the proceeds, and if so David, how is it to be collected.
Many thanks,
Vancouver
Thanks so much.
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david ingram replies:
Since 1989, he should have been reporting the accrued interest and paying
tax in Canada. Remember when they changed the taxation of Canada Savings
Bonds.
In practical terms, he could amend his returns back to 1996 and then just
report the rest (of the interest) when he brings it back.
Legally, under section 75 of the Income Tax Act, his parents were supposed
to pay the tax on this until he reached 18.
Also, if they immigrated to Canada at some time, any interest earned before
the date of arrival would not be taxed in Canada.
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