# Tax Implications for Gift of Shares



## CadMan (Apr 16, 2010)

Hi all,

I was recently given a gift of shares and was wondering what the tax implications will be. I know that generally there is no tax on a gift, but I seem to recall different rules for gifts of company stock. Is there anyway to shelter this gift to avoid the large capital gains hit when I sell the shares?


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## cardhu (May 26, 2009)

> _Is there anyway to shelter this gift to avoid the large capital gains hit when I sell the shares? _


Sure ... place it in a registered account (TFSA, RRSP, etc.). 

Gifts of shares are treated no differently than any other gift ... there are NO tax implications to the recipient ... but there can be tax implications to the gifter, if there were unrealized capital gains on the property (shares or otherwise) at the time of the gifting, or if any attribution rules apply.


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## OhGreatGuru (May 24, 2009)

To further elaborate, you need to make a record of what the share price was on the date you received the gift. That will be your "deemed purchase cost" when calculating any future capital gains/losses when you dispose of the shares.

The person who gave you the shares has a tax consequence - they are deemed to have sold the shares at Fair Market Value. This is not a Gift Tax. This is capital gains tax on the disposition of property.


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## CadMan (Apr 16, 2010)

Thanks for the info. Is there any risk the CRA could take the position that the shares were not a gift? In my particular situation, the shares came from a client - someone who is very well-off and likes to take care of the people who work with him. There really was no expectation of payment or payment of shares in lieu of a cash payment, but I could certainly see the CRA trying to characterize the gift a a "payment" or "bonus" that she be included as part of income. Is there anything I can/should do to document that this really was a gift that should not be subject to tax?

PS: Good problem to have, I know!


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