Sending large money transfers to Canada: Tax laws to know | finder.com
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Tax guidelines and regulations for large money transfers into Canada

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Emigrating, studying or starting a business up north can involve big money. Should you worry about taxes?

The US and Canada share the longest international border in the world. But when sending money over that border to Canada, both you and your recipients could face laws and legal paperwork, depending on how much you’re gifting.

Before you move your money out of the US, learn when our northern neighbo(u)r requires taxes on cash remittances.

How Canada regulates large remittances

When sending a lot of money abroad to friends and family, you might be concerned about taxes — and how they affect your recipient.

Canada does not regulate or tax most gifts of cash sent into the country. In short, citizens can receive as much cash as they’d like without triggering a gift or capital gains tax. Because of this, your recipient shouldn’t have to deal with cumbersome legal documents after they’ve accepted your remittance.

Exceptions come into play when that cash is in the form of property, company shares, designated stock or other securities. In that case, your gift may be subject to 50% capital gains tax, depending on the circumstances of your transfer.

Do I have to report large transfers out of the US?

With so much attention on money entering and leaving the country, if you fail to report large sums out of the US, don’t know you have to report them or don’t report them correctly — it will likely be discovered.

Although Canada and US are close neighbors, you’ll need to abide by US laws if you’re sending more than $10,000. In the years after 9/11, banks are required to report cash transactions into and out of the country. And money transfer companies are sometimes held to reporting thresholds as low as $1,000.
Sending a lot of money out of the country? Know what the IRS expects of you.

How will my recipient receive my remittance in Canada?

Depending on the provider, your options for delivering money to your loved ones include bank-to-bank transfers, cash pickups and even deposits to mobile wallets.

To pick up your transfer in person, your recipient may need to provide picture ID or a confirmation number to receive your funds. If they own an account with a Canadian bank or money transfer company, they may not be required to provide this information each time you send money.

As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.
How to set up a business entity in Canada

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    20 Responses

    1. Default Gravatar
      PrashantSeptember 20, 2018

      I am in India and my son is studying in Canada. I want to send his tution fees as well as his living expenses to his bank account in Canada. Will there be any tax implication on my son, if he receives all this money in his account? Is there a limit to which he can receive money in his account?

      • finder Customer Care
        JoshuaSeptember 24, 2018Staff

        Hi Prashant,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        Generally, there won’t be any tax implication on your son when you send money to Canada. However, you may also want to check with the tax law of India if there is any tax implication for your transfer.

        Regarding the limit, that would depend on the money transfer company you use if they have put some limits on how much you can send. The limit would also depend on the type of savings account of your son. For this reason, it would be a good idea to directly get in touch with your service provider and the receiving bank.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    2. Default Gravatar
      ExPatJuly 7, 2018

      I’m considering moving money out of the states to a savings account in Canada. The money has already been taxed and is my personal savings. The amount is between 30 and 50K. What are the ramifications of doing this? Will there be a problem if I decide to return the money to the US?

      • finder Customer Care
        JoshuaJuly 23, 2018Staff

        Hi ExPat,

        Thanks for getting in touch with finder. I hope all is well with you. :)

        You need to report large sums out of money when moving it out of the US.

        Those who fail to report can expect fines of up to 5% of the asset value involved or $10,000 a year for up to six years. For those who wait until an investigation is launched, the penalty increases to up to 50 percent or $100,000 — whichever is greater. That amount can be applied to every year you fail to report for up to six years. You could also face criminal charges and up to 10 years in prison.

        For extra peace of mind, work with a professional or reputable transfer company to ensure your compliance in all areas. Learn more about how to move your money out of the country legally by reading this guide.

        If ever you decide to return the money to the US, the same law applies. You need to report the transaction to the authority.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    3. Default Gravatar
      AnkitJune 23, 2018

      Hi i want to send 20,000$ CAD to India which is the best way and will i be charged any Tax?

      • finder Customer Care
        nikkiangcoJune 24, 2018Staff

        Hi Ankit,

        Thanks for your message.

        Canada does not regulate or tax most gifts of cash sent into the country. In short, citizens can receive as much cash as they’d like without triggering a gift or capital gains tax. Because of this, your recipient shouldn’t have to deal with cumbersome legal documents after they’ve accepted your remittance.

        Kindly note that we’re a product comparison website and we don’t represent any company we feature on our site. You may choose from the providers stated above. You may consider transfer fees and shortest transfer time when choosing your money transfer facility.

        Hope this clarifies.

        Regards,
        Nikki

    4. Default Gravatar
      CuriousJune 16, 2018

      1. How much money can my parent send to me as a gift to help buy my home?

      If I sell my primary home outside India to buy a primary home in Canada is the any tax implications or restrictions in bringing money to Canada?

      • finder Customer Care
        JoshuaJune 18, 2018Staff

        Hi, Curious to ask,

        Thanks for getting in touch with finder. I hope all is well for you. :)

        Are you living in Canada? If yes, it is worth noting that Canada does not regulate or tax most gifts of cash sent into the country. In short, citizens can receive as much cash as they’d like without triggering a gift or capital gains tax. So, this means that your parents can send as much money or gift to you. Of course, your parents should also check the legal and tax implications of their money transfer from their local area.

        Selling your home in India and bringing the money in Canada doesn’t trigger any tax obligation. Of course, when you sell your home, you might pay tax in India. You’ll be taxed in Canada if the money you bring in the country is in the form of property, company shares, designated stock or other securities. In that case, your gift may be subject to 50% capital gains tax, depending on the circumstances of your transfer.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    5. Default Gravatar
      ammyJune 11, 2018

      Hi Everyone, I am an Indian Citizen living in Canada currently. My question is how much money can one send to his/her country(India). In other words, what is the highest limit of money one can send from Canada to India legally?

      Thanks

      • Default Gravatar
        joelmarceloJune 13, 2018

        Hi Ammy,

        Thanks for leaving a question on finder.

        There is no limit on sending money from Canada to India, provided you pay the required taxes. But, there is a limit of US $14,000 per person per year for gift tax free transactions. Any amount sent above US $14,000 per person per year, the sender is responsible for paying the gift taxes.

        Cheers,
        Joel

    6. Default Gravatar
      reneeJune 4, 2018

      Hello There
      I work abroad and will be returning to Canada…what is the best way to transfer my earnings to Canada if over 40k can.?

      Thank you

      • finder Customer Care
        JoshuaJune 5, 2018Staff

        Hi Renee,

        Thanks for getting in touch with finder. I hope all is well for you. :)

        I may not be able to tell you the best way to transfer your money since I’m not completely familiar with your situation. However, the first thing you need to do is check the laws and regulations of the country where your money will be coming from. Comply with these regulations before you send your money.

        When it comes to Canada, you need to determine the nature of your cash. Canada does not regulate or tax most gifts of cash sent into the country. In short, citizens can receive as much cash as they’d like without triggering a gift or capital gains tax. Exceptions come into play when that cash is in the form of property, company shares, designated stock or other securities.

        To send the money to Canada, you might check your options through the table above page.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    7. Default Gravatar
      KatrinaMay 15, 2018

      Hi, I will be moving to Canada in a few days as a PR (spousal). I currently live in Dubai, and want to wire transfer my savings (over 50k CAD) into my husband’s account in Canada. Do I need to worry about any tax implications in Canada? Or does he need to report it anywhere? Thanks!

      • finder Customer Care
        nikkiangcoMay 16, 2018Staff

        Hi Katrina,

        Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

        Below are the answers to your inquiry:

        Do I need to worry about any tax implications in Canada? Or does he need to report it anywhere?

        When sending a lot of money abroad to friends and family, you might be concerned about taxes — and how they affect your recipient.

        Canada does not regulate or tax most gifts of cash sent into the country. In short, citizens can receive as much cash as they’d like without triggering a gift or capital gains tax. Because of this, your recipient shouldn’t have to deal with cumbersome legal documents after they’ve accepted your remittance.

        Exceptions come into play when that cash is in the form of property, company shares, designated stock or other securities. In that case, your gift may be subject to 50% capital gains tax, depending on the circumstances of your transfer.

        Hope this was helpful. Don’t hesitate to message us back if you have more questions.

        Best regards,
        Nikki

    8. Default Gravatar
      PiyuMay 15, 2018

      Hello, I am from India.I got admission in montreal,Canada. Now, I have to pay 14,474$ fees. Is there any tax or charges when I transfer fees from INR to CAD?

      • finder Customer Care
        JoshuaMay 16, 2018Staff

        Hi Piyu,

        Congratulations on getting admission in Montreal, Canada. :)

        Regarding your question, Piyo, Canada does not regulate or tax most gifts of cash sent into the country. This means that you can receive as transfer cash as you’d like to pay for your admission. For this reason, you shouldn’t have to deal with cumbersome legal documents when transferring even large amount of money.

        Of course, please note that exceptions come into play when that cash is in the form of property, company shares, designated stock or other securities. In that case, your gift may be subject to 50% capital gains tax, depending on the circumstances of your transfer.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    9. Default Gravatar
      PauloMay 7, 2018

      I am a brazilian and a non-resident according to US laws

      I wish to protect some savings I have against the crazy exchange rates and I was wondering what kind of taxes I would need to pay and what kind of paperwork I will have to fill when I transfer the money back to my country.

      Thanks

      • finder Customer Care
        JoshuaMay 7, 2018Staff

        Hi Paulo,

        Thanks for getting in touch with finder. I hope all is well for you. :)

        Exchange rates change daily and it is really important for you to know when is the best time to exchange your money.

        In regards to taxes, it is crucial to understand that the IRS might need to check your money transfer transaction. Depending what and how much is going to where, the IRS requires you to fill out any number of tax forms. These forms include Form 114, 709, 3520, 8938. It would be wise to talk to a professional for your specific requirements.

        If you want to know if you need to pay taxes on a large money transfer, please go to this page.

        If you want to know how to send money to Brazil, please go to this page.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    10. Default Gravatar
      OMApril 13, 2018

      I am indian working on work permit in Canada

      My friend from USA want to send cash via bank transfer to my account in canadian bank.
      I have following questions.
      1-what will be tax implication?
      2-Do i have to add this amount into my income and pay tax?
      3- what happens if i spends this money for stocks and earn cspital gain? Do i have to share the gain with my friend?

      • finder Customer Care
        JoshuaApril 16, 2018Staff

        Hi OM,

        Thanks for getting in touch with finder. I hope all is well for you today. :)

        Let me try to answer your question one by one.

        1. Whether the money sent to you will be taxed or not depends on the type of money you are going to receive. If it is a gift, generally, you don’t get taxed for that. However, when that cash is in the form of property, company shares, designated stock or other securities. In that case, your gift may be subject to 50% capital gains tax, depending on the circumstances of your transfer.

        2. Again, it depends on the purpose of the money.

        3. If you spend this money for stocks and earn capital gain, then that’s the time you need to pay taxes. Sharing the gain to your friend depends on you. You don’t have any legal obligation unless you have a signed contract or any legal agreement.

        I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

        Have a wonderful day!

        Cheers,
        Joshua

    US International Money Transfers Offers

    Important Information*
    XE Money Transfer

    Transfer up to $500,000 with no minimums and no fees.

    WorldRemit International Money Transfers

    Use promo code FINDER to send your first transfer with no fee.
    Send to 110+ countries for bank-to-bank deposit, cash pickup or mobile top-up.

    World First

    No maximum limit, no fees and competitive exchange rates for 100+ currencies.

    TransferWise

    Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks.

    Go to site