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By Jason Heath, CFP on March 18, 2025
Estimated reading time: 4 minutes

By Jason Heath, CFP on March 18, 2025
Estimated reading time: 4 minutes

Want to give or loan money to your children? Here are the factors that determine who pays tax in Canada.

Is there a tax on cash gifts to children in Ontario?

—Virginia

When you give cash to a child, Virginia, there are generally no tax implications for the recipient. They do not have to worry about paying tax on it, no matter where they live within Canada.

There may or may not be other tax implications, though. So, I will outline cases where tax may result from the act of giving or from a child earning income on a gift.

If you transfer an asset to a child, this generally results in a deemed disposition. This means that when you transfer stocks or real estate or shares of a private company, it’s as if you sold these assets at their fair market value.

This deemed disposition applies during your life and upon your death. When you die, you are deemed to dispose of your assets. Only assets left to your spouse can be tax-deferred. Assets your children inherit are subject to tax payable by your estate before they are distributed.

However, unlike capital assets, cash does not appreciate in value. So, there’s no deemed disposition on cash, and there’s no tax to pay unless the cash is withdrawn from a........

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