heard that Canada is different, there is no inheritance tax; but there are a lot of people say that in Canada, people died is the need to pay a lot of taxes, how is this going? In Canada, indeed there is no inheritance tax. However, because Canada has asset value added tax, so, there are a lot of heritage in the death of its owner was frozen. This sounds a little contradictory, right? In this way, we give an example.
I have a client Mr. Zhang, he died, there are two sets of property in his name, one of them can be exempt from value-added tax, another is need to be calculated in accordance with the provisions of value-added tax, the beneficiary may inherit. If, at the beginning of the purchase of 1 million houses is second Canadian dollars, when the house was added to the death of 3 million, it is necessary to press 1 million (50%) vat. Canadian tax law has a regulation: death is regarded as a sale (Deemed Dispositions upon Death). It means people died, under the name of the assets need to be liquidated, as part of the value of implementation, you need to pay tax declaration. In other words, is not the death tax problems still exist One finished, all is finished.. The death of the year still need to file tax returns, and the payment of taxes is likely to be the highest paid taxes in his life. Mr.
, who died in June 30th, is the two part of his personal income tax: the global income for the period January 1st to June 30th. On June 30th, his name is regarded as all assets sold, to market FMV minus the fair trade market on the day of the original purchase price, if there is value, value-added and other half of global income added together, need to pay personal income tax calculation. This is not a small burden for the heir. So, there is no possibility of paying the capital appreciation tax? Be on the cards！ In the transfer of assets, if there exists the following four kinds of circumstances, can be exempted from value-added tax capital.
Spousal Rollover, a spouse transfer of assets if two couples to buy a house is a joint purchase, one of them died, the asset will automatically transfer to another person, in this process, not only without probate procedures are not always linked to asset tax, one of the last people died and then count the vat. However, it should be noted that, if not at the same time to buy, but later put another person's name into the practice, do not belong to the joint holding (TENANCY JOINT), can only be considered jointly held (IN COMMON TENANCY). The difference between the two is that the joint holding two MR and Mrs Zhang, if Mr. Zhang died, Mrs. Zhang automatically to Mr. Zhang; if Mrs. Zhang died before, Mrs. Zhang's part of the automatic to Mr. zhang.
jointly held two MR and Mrs Zhang, if Mr. Zhang first died, that part of the assets of Mr. Zhang will become "testamentary assets", to go to court the certification procedure complex, to determine who will inherit, but will not be automatically transferred to Mrs. Zhang; and Mrs. Zhang will continue to hold the part his own.
two, Principal Residence from the main residential VAT Exemption if a person name is only a self occupied housing, then the value of the property is not the value added tax to capital. But it is to be explained, any family can only be designated as the owner of a property in any year. If a parent dies, leaving his primary residence as a legacy to his children, there is no tax question. However, if the child has a major residential, from the date of succession, must be designated as one of the investment property, the property will be transferred in the future tax issues.
three, small business value-added tax exemption rules Small Business Exemption if you have a Canadian controlled private enterprises (CCPC) shares, then, in the sale of the shares, there will be 800 thousand of the capital gains tax allowance. In addition, qualified farm assets (Farm Property Qualified) and qualified fisheries assets (Fishing Property Qualified) also enjoy the same capital appreciation tax allowance. For example, a person a few years ago to invest 200 thousand Canadian dollars in CCPC, he died, the value of the shares to 1 million 100 thousand Canadian dollars, he needs to pay the capital appreciation is 110-20-80=10 million.
four, Life Insurance Benefits life insurance compensation tax Exemption including dividends deposit insurance, investment linked insurance, term insurance, accidental death insurance, the death of the insured after compensation directly from the insurance company issued a check to the hands of the beneficiary, do not need to pay VAT, do not need to creditors, nobody can amend the beneficiary of the court, the court certification fee is not required to pay 1.4%. The purchase of life insurance can transfer the assets to the beneficiary, and the life insurance compensation made by the beneficiary does not need to pay tax. Investment type insurance, its investment income in a certain range and the amount required for capital appreciation and interest income tax. The insurance policy dividends, dividends are not taxed, but directly from the insurance policy cash value in use may lead to tax problems, and through the third party mortgage loans, indirect use policy cash value is not triggeredTax issues.
investment insurance money and money into RRSP and other savings plans are different. The purchase of RRSP, although it is now produced by the capital profits do not need to pay tax, but the future need to pay tax at the time of withdrawal.
the following is most people may not know the tax cost of travel medical insurance (Travel medical insurance) annual number of Canadian outbound tourism will buy travel insurance, this can also be used to tax, so don't throw away your receipt. Children's activities (s' activities Children) children reported some interest in classes, such as sports, language classes, music classes can be used to tax. Aid batteries (Hearing) for example, you buy a hearing aid battery products, but also can be used for tax deduction, the premise is that the same to keep a good receipt. The bus ticket (Public transit) bus pass can be used to remove the tax, because you are a student or the elderly enjoy the relief, you can still be used to pay their own part of the tax.
(this is for reference only and does not constitute a specific proposal)
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