Sent: Wednesday, September 06, 2006 7:37 AM
To: taxman at centa.com
Subject: Cross-border gift tax question....Thanks
Hello
Thanks you very much for taking these type of questions. I know you
are just getting back in town and that your probably very busy...but
if you have the time here is my issue. My Grandparents are from
Canada originally but have been US citizens for around 30 years now.
They recently inherited roughly $20,000 from a Canadian relative. The
lawyer handling it says they might have to pay Canadian taxes on the
inherited money because they are US citizens now. Yet the other
recipients of this inheritance, who are Canadian citizens, do not have
to pay the same Canadian taxes. My Grandparents are confused because
when inheriting money from Canadian relatives in the past they did not
have to pay these taxes. However, the last time they received a
financial gift was in the 1980s. Have the laws changed and is the
lawyer correct in saying that they now must pay something like 20% or
so in Canadian taxes? Thank you very much for your time and help.
============================================
david ingram replies:
There are no Canadian Inheritance taxes for anyone. Assuming that they took
out their US citizenship "after" Feb 14, 1977, (just about 30 years) they
are still Canadian citizens.
However, if the money was in an account for a while and earned interest or
dividends there would be Canadian tax of 10% on any interest and 15% on any
dividends.
hope this helps.
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
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