Families

Tax Tip: Taxes on Gifts and Inheritances

The CRA does not tax most gifts and inheritances. However, there are some exceptions to this rule.

If your employer gives you a cash gift, you are required to report it as income. If the gift is not cash, it may not be subject to income tax as long as you received it in honour of a special occasion or as an award for a work-related accomplishment. Under CRA regulations, near-cash gifts — such as gift cards — are considered cash.

If you receive a large gift of capital property, such as a house or shares in a business, you do not have to pay income tax on it. However, the individual who gifted you the property may owe capital gains taxes. When calculating his capital gains, the giver must use the fair market value of the property at the time that it was given to you.