# transferring large gift sums to family members



## the-royal-mail

I had a somewhat strange discussion with my bank yesterday regarding something I was trying to understand. I'm not really sure they answered my question, so I'm going to post it here in the hopes CMF folks will be clearer. 

Consider someone wanting to transfer a large sum of money ($10K give or take) as a gift to a family member. Is it okay to simply write out a personal cheque for that amount? If not that amount, what is a safe maximum amount to write cheques for? Would it be better to write three cheques of $3300 each instead of one for $10K?

An example application would be parents who promise to buy a car for child (but child picks the car and deals with the dealer on their own).

We do not want to fuss with bank drafts and other fee-intense methods. All of us trust each other and being it's a gift, a personal cheque (a service already being paid for every month) should suffice.


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## MoneyGal

$10,000 is a reporting threshold for FINTRAC. 

Banks don't like to deal with amounts of $10,000 or more because it triggers mandatory reporting activity on their part. Technically a person-to-person non-cash (cheque) transfer within Canada doesn't trigger a reporting requirement (IIRC) but it does require the bank to conduct a "suspicious transactions" screening - which, if you know your bank, you are certain to pass. 

However, $10,000 is just now related to as a hot-button trigger-point in the banking world.


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## stardancer

As far as I know, there is no maximum on the amount of a cheque. The receiving bank, however, will probably put a hold on the funds until it clears. Or you could get a certified cheque.

When my daughters left home, they left one TD account open each as that is where I deal. When I transfer $$ to them, I just do it over the net (under $5000) and at the branch (over $5000).


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## Plugging Along

We've had no issues with amounts much higher than $10K, especially amoung family members. Our parents lent us money before and wrote a single check. We've done the same thing, and have never had any problems. Mind you, ours only happens very infrequently, but there wasn't anything different from a $50K cheque to a $5K.

I would assume if its for a gift or something that is easily explainable, then there will be no worries.


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## Four Pillars

Just do one cheque - the FINTRAC thing doesn't matter for you.


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## Charlie

A cheque greater than $10K is no big deal. Lots of those go through everyday. Just write the cheque (or direct transfer if you've progressed to the online world). FINTRAC reporting applies only to cash transactions.

You can transfer or gift as much as you want to adult kids or family members. There's no 'gift' tax concerns in Canada as there are in the US or some other countries. Our southern neighbours need to be cautious about this stuff -- but not us.


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## the-royal-mail

Thanks for the fast and detailed responses. I had been assuming cheques were considered cash. So in that sense, if I have $10K or more to transfer, a personal cheque is actually probably better than things like wire transfers and drafts, which I suppose are closer to cash than a cheque is. As I said, cheques are a far more practical and convenient method. Online banking transfers have all sorts of fees attached which cheques do not.


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## Eclectic12

the-royal-mail said:


> Thanks for the fast and detailed responses. I had been assuming cheques were considered cash. So in that sense, if I have $10K or more to transfer, a personal cheque is actually probably better than things like wire transfers and drafts, which I suppose are closer to cash than a cheque is. As I said, cheques are a far more practical and convenient method. Online banking transfers have all sorts of fees attached which cheques do not.


The one other thing that I read in a tax book a few years ago is to also provide a letter to the person receiving the gift indicating it is a gift/how much.

This was because others had run into problems where CRA decided they had too much money for the income reported and therefore were "hiding" income to avoid taxes.

I don't remember what amounts were the threshold. 

The point the book made was that if CRA goes this route and issues a assessment - it is up to the individual to prove CRA wrong, not the other way round. Writing a letter on the other hand - takes five minutes to write/file and will save a ton of time, if the CRA gets concerned.



Cheers


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## CuriousReader

Transferred around 6-digit range from overseas (parents), transfer around that money between my own bank accounts here, as well as transfer around to my sibling account.

No problem at all, just a little bit longer hold.


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## marina628

I wired my parents $30,000 last fall to pay for the car i bought them and I never did anything with my bank nor did they declare anything.When we go to visit them once a year we have a SUV to drive so that is why we did it and I love my parents


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## MoreMiles

It's a hit and miss. 

If you have an overzealous bank employee, you will be grilled, quizzed, and held hostage with your money.

Do a search on forums, like Redflagdeals... some poor souls got their money frozen repeatedly because someone at Scotiabank did not like it.

Cash deposit in a large sum is almost guaranteed to trigger an investigation unless you are a merchant with regular cash deposits for business.

Wire transfer from a foreign country is subject to investigation. This poor guy in Redflagdeals had to produce an official letter certifying the source and purpose before the bank will release it. 

It's almost like... your money is dirty until proven otherwise. If you use cash, you must be hiding something kind of mentality.


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## LBCfan

I wouldn't worry about. What's the worst thing that can happen? You just have to explain it. I've done all of the following with no questions asked:

Gave $50K+ to two kids when they bought houses (cheque)
Gave $20K to kids one XMAS, Ok I was feeling flush (cheque)
Paid by cheque for our current house, $200K-ish
Wire transfer to car deal, $35K.
Now, if I walked into the bank with $20K in small bills, that might be suspicious. Or if I tried to buy a $50K car with cash in small bills, that too.

If you ain't being bad, you got no problem.


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## Plugging Along

LBCfan said:


> I wouldn't worry about. What's the worst thing that can happen? You just have to explain it.
> 
> 
> If you ain't being bad, you got no problem.


+1.. it really isn't that big of a deal especially if you're both from Canada, even if you aren't it not a big deal. 

We've made many large cash deposits and transfers over the years, and have never had a problem.


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## Sherlock

I'm reminded of this story: http://www.autoblog.com/2007/12/23/man-buys-new-truck-with-only-pocket-change/


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