Gifting forein property to a relative before landing

[andrew999929]

I have a small shop in my home country that I plan to gift to my brother before landing permanently in Canada. Is that legal? And are there any tax implications on that in the future after I land ?

Thank you

 

[canuck78]

Most of this scenario depends on the laws in your home country. It is an issue if you keep on receiving profits from the business or your transfer is not genuine and you expect the property back, That would really mean you owned the property and loaned it to him.

 

[andrew999929]

Hey Canuck 78. Thanks for the feedback. I don’t expect the property back and I won’t be receiving any profits from the business.. what do you advise?

 

[canuck78]

Has nothing to do with Canada then. Follow the rules in your home country for gifting a business.

 

[andrew999929]

My question is whether I’ll need to pay Canadian taxes on its income or not after becoming a PR..

 

[steaky]

My question is whether I’ll need to pay Canadian taxes on its income or not after becoming a PR..

That would matter if you become a Canadian tax resident. By earning foreign rental income or gifting your shop to others would trigger capital gain or loss and either way you will need to report rental income and the property disposition in your tax return.

By merely becoming PR is not a concern. It depends whether you establish certain residential ties and become Canadian tax resident.

 

[andrew999929]

Hey steaky. Thanks for the feedback. Once I become a Canadian tax resident, why would I need to report the income from the shop; by gifting the shop to my brother I won’t be owning it anymore. I’m a little confused here