Personal Finance & Money Asked by Dugan on September 5, 2021
I am planning on paying my girlfriend back 18K, which she plans on putting in her RRSP. Rather than sell funds that are in my non-registered investment account (which would cause me to pay capital gains) I was hoping to make an in-kind transfer of the shares to her, which she could then put in her RRSP directly. Am I allowed to do this? It seems like this would allow people to avoid paying capital gains taxes whcih I’m sure the government doesn’t allow. What am I missing, who is charged the capital gains and when?
Yes you have to pay capital gains tax. Here is a document explaining all the different scenarios.
Transfer made to arm’s length individuals.
Arm’s length individuals generally include individuals who are not related to you and who act independently from you. At the time of the transfer The transfer of assets is a taxable transaction; you dispose of your assets to the arm’s length person at fair market value. You report the capital gain or loss realized on the disposition on your income tax return. The ACB of the transferred assets is the fair market value of the assets on the date of transfer.
Answered by brian on September 5, 2021
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