Helping Your Kids? CRA Takes a Cut
Why “gifts” can create tax exposure for parents.
📥 Free resources from this episode
The Family Trust Decision Guide
The Advisors TableThe Family Trust Decision Guide
Use this guide to determine whether a family trust fits your situations and learn when it can help protect wealth, reduce tax, and preserve flexibility.
Show Notes
In this episode, we discuss how helping your kids financially feels normal. But what most parents don't realize is this: perfectly reasonable generosity can create tax problems for the parents.
We reveal how common financial support for children can trigger attribution rules, deemed dispositions, shareholder loan issues, and income inclusion traps that many families only discover years later – often during audits, estate reviews, or corporate filings.
Through Our Conversation, We Break Down:
• Why helping your kids can trigger tax for you – not them
• How attribution rules apply to children under 18
• What actually changes when your child turns 18
• The difference between gifts and loans (and why it matters)
• Section 56 family loan rules for adult children
• Why gifting a cottage or property can trigger immediate capital gains tax
• Corporate loans to children and the one-year repayment trap
• Why down payments labeled as "gifts" may not be gifts at all
• Practical ways to help your kids without funding CRA
This Episode Is Essential To View For:
✓ Parents helping kids with down payments
✓ Families transferring cottages or investment properties
✓ Business owners funding children's ventures
✓ Professionals gifting investment capital
✓ Anyone planning intergenerational wealth transfers
Key Topics Covered:
• Attribution rules for children under 18
• Investment Income vs. Capital Gains Treatment
• RESP carve-outs and when attribution does not apply
• What stops – and what doesn't – at age 18
• Section 56(4.1)-(4.3) family loan rules
• Gifts vs. Loans to adult children
• Deemed Disposition when gifting property
• Principal Residence and QSBC Nuances
• Corporate Shareholder Loan Rules (1-year repayment deadline)
• Down Payment Documentation Risks
• Prescribed-rate loans and interest payment timing
• How to structure family support properly
Full Transcript
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