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Have you plan your investment so your assets will not belong to the tax man?

BookerL

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Apr 29, 2014
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Hello all
http://www.canadianliving.com/life/money/what_to_do_with_an_inheritance_3.php
Death and taxes
Unfortunately, the tax man doesn't forget us when we die. Before an inheritance can be doled out, the Canada Revenue Agency(CRA) has to get a cut. Depending partly on how rich the deceased person was, up to half of the estate can go to taxes.

On top of that, rifling through reams of paper and refereeing family squabbles can be a massive job for the executor. In the end, many beneficiaries wind up having a long time to contemplate how to spend the windfall. "I've seen estates settle everything in three months from the date of death," says Black Hughes. "And I've seen it go for seven years."

How to handle taxes
A year after their father passed away, Ann and her three siblings are still grappling with tax issues. "We are paying a huge amount to the tax man," says Ann. When someone dies and leaves everything to a spouse, there's usually no tax hassle: RRSPs, registered retirement income funds (RRIF), real estate and other investments can simply roll over to the husband or wife.

"The transfer is done through what CRA calls a refund of premiums," explains Foster. "The amount of the deceased's RRSP is included in the beneficiary's income and offset by an RRSP tax receipt for the same amount. This effectively rolls over the deceased's RRSP to the surviving spouse without affecting the spouse's own RRSP contribution limit."

The tax situation gets more complicated when the surviving spouse dies – or if the deceased was single or divorced. Under the federal Income Tax Act, the person is deemed to have disposed of company shares, real estate or any other capital property at fair market value. "Basically this just means that the government pretends you sold all of your property the second before death," explains James Rhodes, a tax lawyer with the Miller Thomson firm in Kitchener-Waterloo, Ont. "The estate hasn't sold anything. It just has to pay tax now on things it’s still holding in its hands."

A final tax
The executor of the will files a final tax return for the deceased. In it, RRSPs and RRIFs must be reported as if they have been cashed in. Assets that have capital gains – or an increase in value from the time they were purchased – must also be reported. (One bonus: The deceased person's principal residence is exempt from capital gains tax. Additional residences, such as a cottage, are not.)

In the end, an estate can be stuck with a hefty tax bill, one that can eat into what the beneficiaries will receive. "The beneficiaries don't pay the tax," explains Rhodes. "They simply get less of a gift, provided there is enough cash cashable investments or insurance paid to the estate."

Once the executor settles the estate, CRA issues a clearance certificate to confirm all income taxes have been paid. By the time you get your inheritance cheque, you shouldn't have to worry about the taxes. "It's a bit like winning the lottery," explains Foster. "The taxes should have been paid by the estate. So the money, when you receive it, is yours."


http://business.financialpost.com/2...res-what-happens-to-your-assets-when-you-die/



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Booker
 

PopeDover

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Jul 3, 2009
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deplorable basket case
Booker, your question seems misleading. The tax man takes a cut of the capital gains on the asset, not the asset itself. If you view your assets in terms of a currency value I think it can be misleading due to that potential liability at time of conversion to the currency, which according to the linked article happens automatically at time of the owner's death for all non-registered assets. Of course there's no guarantee what the tax people will do in the future regarding your assets. If you want to feel secure then you probably shouldn't read any history books or keep stuff in Cyprus, but according to current local laws your assets are yours and your tribute is based on gains and income. If I'm wrong about that I hope someone tells me.
 

BookerL

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The tax man takes a cut of the capital gains on the asset, not the asset itself. .
Yes on the Capital gain .
People who are in realestate investment and have multiple properties for a long time ,their assets might be mostly capital gain, it does apply to other capital gain revenue investment
How do you avoid it ?That remains the question ?:confused:;)
And their is a answer ;)



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BookerL

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Apr 29, 2014
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question seems misleading. .

What is actually misleading is to believe that the beneficiaries will enjoy all of the assets value acquired through life .

A few years back a friend of mine had the opportunity to acquire a personal residence in the suburbs of Montreal .
The owner was 86 years old is wife had died a year earlier she was co owner ,the husband was not touch by the tax ,however he was also dying he was in stage 4 of a brutal cancer .is son was the executor and forced is father to sell the house before is father died under fair market value ,t he father died 3 or 4 months after the transaction.
The asset in that case before selling was mostly capital gain, after it wasn't ,the father alive benefited from exoneration of capital gain because it was his principal residence


Better be aware before then after



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