# Large cash gift from overseas



## HKboy (Jul 16, 2011)

Great forum you have here!

I have a question about receiving a gift from overseas. My retired uncle in Hong Kong is in the process of starting to distribute a large portion of his estate. He's not the type of person to hold on to every penny until the day he dies. He wants to distribute most of his money before his death and have time to see people enjoy his gifts. As his favourite nephew, I'll see the largest chunk, nearly $2 million Canadian he tells me. I know that gifts are tax free in Canada. I'm concerned about the amount of money and Canada Revenue possibly asking questions. He wants to transfer the money to an account he has in Canada (he gets a good forex rate that way) and then transfer it to my account. I know these transactions will be reported to FinTRAC, but if everything is on the up-and-up, there shouldn't be a problem, right? Is there anything I can do to minimize problems? One of my cousins was suggesting having my uncle get write a letter ("To Whom It May Concern") to say that this money is his gift to me, and having a lawyer notorize it. Does that make sense to you? The only other problem I see is that this uncle has a son himself. He'll actually be giving his son less money than he'll be giving me (It's a long story). I'm worried that if CRA starts asking questions, they'll consider that suspicious.

Obviously any income I earn on this money once invested in Canada is taxable in my hands, that I realize.

Any suggestions?

Thanks!


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## Causalien (Apr 4, 2009)

You'll definitely need a statement of gifting as suggested.

Also consult a friggin tax law + accountant for this (better yet, someone who specializes in both tax law and is an accountant). Their fees are peanuts compared to $2 million.

Usually it's your uncle who will have problems. Since he is the one moving money from HK to Canada. His is the account that will raise the flag. Questions to ask and never answer online: Is he a CDN citizen? Did he report his income from HK in the past? 

And, do not ask these questions online again, unless you are confident you can't be tracked.

PS. Please don't buy a lotus and kill people on the road while you are drunk with the sudden wealth.


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## MoreMiles (Apr 20, 2011)

Is your uncle a Canadian resident? Did he report any foreign property in the latest tax return? If not, CRA may question the sudden appearance of property and freeze the bank account. You need to talk to a tax accountant and lawyer first to avoid potential troubles.


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## HKboy (Jul 16, 2011)

MoreMiles said:


> Is your uncle a Canadian resident? Did he report any foreign property in the latest tax return? If not, CRA may question the sudden appearance of property and freeze the bank account. You need to talk to a tax accountant and lawyer first to avoid potential troubles.


He's not now and has never been a Canadian resident. He used to do a bit of investing here so that's why he has a Canadian bank account. I believe he's filed Canadian tax returns in the past as a non-resident.

Someone mentioned a "statement of gifting." Is that a CRA form or just a letter he would draft himself or his lawyer would draft for him?


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## TomF (Jul 26, 2011)

Could he not just leave the money in a bank in Hong Kong?
I don't know what the _latest_ status of Hong Kong banks is, but the last I heard, Hong Kong tax rates were a lot lower than tax rates in Canada. If you have a Hong Kong bank account, or could open one, perhaps even with him as a co-signer, that might be the best option. (Do you visit Hong Knog regularly?) Then you could access the money every now and then without having to get Canadian bureaucrats involved.


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