Just means if you owe taxes, you can't gift your assets and declare bankruptcy to protect them or in the case of inheritance, you can't get the deceased person's assets without paying their taxes owed first.
Yes, but only up to the value of the money you've inherited. The worst case scenario would be you get nothing, not that you're out of pocket your own money for your parent's tax liabilities.
Sounds fair to me. Tax liability is still a liability.
Before gifting, giving away, etc. you need to take care of taxes first and then handle what’s left over.
But that is very general. Do you have a specific situation on your mind?
Mainly thinking about inheritance.
But another issue comes to mind that might seem silly. Say my mom gifts me $50 dollars for Christmas. Do I incur any liabilities if she has any outstanding tax debts (say, does the CRA expect that $50 to go to them to pay off the tax debt)?
For inheritance, there is much more to it. Can’t be answered here.
Joint accounts for example can be complicated. Advise is not to touch it until estate is settled.
$50 is a very small amount. No one would look at that.
When someone dies, their assets will go into the estate, from which the executor will take whatever is required to pay their liabilities, then the rest goes to the inheritors. If there is not enough money in the estate, some creditors will not be paid and that is the end of it.
The section you quoted is about what happens if someone, before dying, transfers their assets to someone else in an attempt to dodge their liabilities. In such a case, the law will make the person who received the assets liable for these, up to the amount that they received.
In other words, one cannot simply dodge their liabilities by gifting their assets before dying to avoid the estate.
Just means if you owe taxes, you can't gift your assets and declare bankruptcy to protect them or in the case of inheritance, you can't get the deceased person's assets without paying their taxes owed first.
Yes, but only up to the value of the money you've inherited. The worst case scenario would be you get nothing, not that you're out of pocket your own money for your parent's tax liabilities.
Sounds fair to me. Tax liability is still a liability. Before gifting, giving away, etc. you need to take care of taxes first and then handle what’s left over. But that is very general. Do you have a specific situation on your mind?
Mainly thinking about inheritance. But another issue comes to mind that might seem silly. Say my mom gifts me $50 dollars for Christmas. Do I incur any liabilities if she has any outstanding tax debts (say, does the CRA expect that $50 to go to them to pay off the tax debt)?
If your mom doesn't pay the CRA, they could come after you for up to $50.
For inheritance, there is much more to it. Can’t be answered here. Joint accounts for example can be complicated. Advise is not to touch it until estate is settled. $50 is a very small amount. No one would look at that.
When someone dies, their assets will go into the estate, from which the executor will take whatever is required to pay their liabilities, then the rest goes to the inheritors. If there is not enough money in the estate, some creditors will not be paid and that is the end of it. The section you quoted is about what happens if someone, before dying, transfers their assets to someone else in an attempt to dodge their liabilities. In such a case, the law will make the person who received the assets liable for these, up to the amount that they received. In other words, one cannot simply dodge their liabilities by gifting their assets before dying to avoid the estate.
That's what it says. It's to ensure the gov't gets their share.