This text is taken from Courrier de l’ économique. Click here to subscribe.
If I make a large gift to my daughters during my lifetime, does anyone have to pay tax on the gift?
Just like Louise Barbeau, you don’t want to wait until you die for your children to benefit from your inheritance? You are part of a growing phenomenon, according to what financial planner Fabien Major observes.
“If I rely on what is happening in my office, in my team, it is a record year for monetary donations”, indicates the author of the book What are you going to do with all this money?, aimed primarily at baby boomers. These donations are often used as a down payment on a property.
“When we do our estate planning and we see that we really have enough to see us through to the end of our days, we make more and more gifts to our loved ones,” continues the man who works at Gestion of Assante heritage. If there is a surplus and people see that they do not need to travel more or increase their lifestyle, then the motivation for a donation is to see with their own eyes the results of this financial contribution extra when their children and grandchildren need it most. »
If you decide to give a large sum of money to your heirs (or anyone else) during your lifetime, neither you nor the donees will have to pay tax on this transfer, regardless of its size. value. It’s the same thing if you want to transfer your main residence. It’s considered a gift as long as you don’t ask for anything in return.
However, you must pay attention to the source of the donation, that is to say how you will withdraw the money you are going to give away. You could make capital gains if you sell shares on the stock market or withdraw money from investment funds. This will also be the case if you offer a second home such as a chalet. However, these gains are taxable. Furthermore, withdrawal from an RRSP is taxable, while withdrawal from a TFSA is not.
Mr. Major therefore recommends that people carefully evaluate, with the help of their financial planner, the tax impact of repurchasing securities or transferring real estate before making such a decision. And, of course, you must make sure you have the means to make this donation without jeopardizing your old age.
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