When it May be Wise to Look a Gift Horse in the Mouth
If you have a family member who owes money to the Canada Revenue Agency (“CRA”), and they transfer property to you (for example: money, car, real estate, art, jewelry) for little or no consideration, the CRA may be able to force you to pay your family member’s tax debt up to the value of the property you received.
Many people don’t realize that the CRA has the power to follow the property to the family member, even years after the fact.
What does this mean for you?
If you owe the CRA money, you can’t avoid your debt by transferring title to your assets to a family member.
If you have a family member facing tax trouble, you should think twice about trying to help them out by accepting property from them, as it could mean that the tax man will come knocking on your door next.
If you have questions about tax planning, please contact us.
This information is accurate as of the date posted.