Opportunities And Pitfalls For Foreign Inheritances And Beneficiaries

Special opportunities may be available where a non-Canadian resident intends to pass assets on death to a Canadian resident.

Two common scenarios include:

• Your Canadian-resident client has a parent or other relative who has never lived in Canada and who will be passing significant assets to your client upon death under the relative's will.
• An expat left Canada at least 18 months ago and has become a non-resident of Canada for tax purposes, but has children or other relatives residing in Canada.

In each situation, there may be an opportunity to minimize, or even eliminate, Canadian taxation of the income on the inheritance, resulting in significant savings to the Canadian beneficiary over time.