International inheritance

[hawk999]

Question, I have some property abroad - Real estate, value very likely below 100K. If i leave them to my son or my wife what would be the tax implication in Canada.

I know that if those real estate were coming to me from someone living abroad the tax code to apply would be the one of the country where these real estate are. Same apply in this case?

Any idea? any reference?

thank you

 

[seton]

There are no inheritance taxes in Canada. With Canadian real estate, the property is deemed sold and any capital gains on the date of disposition may be taxed. Then the inheritance is the FMV of the real estate, which again is not taxed.

Because the real estate is not in Canada, the deemed disposition would be subject to the laws of that country. As such, no immediate Canadian (but probably in the foreign country) tax implication. However there will be long term tax implications if you get rental income from the property (declared income on your return) or later dispose it (potential capital gains). So the value of the property will need to be recorded for future tax purposes, i.e. get a property valuation and keep records.