Receiving a cash gift in a foreign country: tax concern?

[PsYcNeT]

I'm currently in China visiting my wife's family for the first time since we've been married, and we have been given a smattering of red envelopes (gift money) totalling a fair amount of RMB over the course of our visit. Her father has advised we spend it all in China, but that seems unfeasibile to both of us.

I've done some cursory research, and found that Canada has no Gift Tax, but I'm just wondering what our options are.

Can we bring it back on the plane and have it converted/deposited in Canada? Would we have to claim it at customs? Would it be considered taxable income anyhow? Is there a large currency conversion fee? Is there a way to deposit it to my bank (TD) while in China? Would it be advisable/possible to wire transfer it to a friend or relative in Canada prior to leaving China?

We're setting up to buy a house in a few months, so to be able to include this as part of our deposit or initial renovation/decoration cash would be preferable than to spend it on consumer good in China.

[Cowperson]

Originally Posted by PsYcNeT

I'm currently in China visiting my wife's family for the first time since we've been married, and we have been given a smattering of red envelopes (gift money) totalling a fair amount of RMB over the course of our visit. Her father has advised we spend it all in China, but that seems unfeasibile to both of us.

I've done some cursory research, and found that Canada has no Gift Tax, but I'm just wondering what our options are.

Can we bring it back on the plane and have it converted/deposited in Canada? Would we have to claim it at customs? Would it be considered taxable income anyhow? Is there a large currency conversion fee? Is there a way to deposit it to my bank (TD) while in China? Would it be advisable/possible to wire transfer it to a friend or relative in Canada prior to leaving China?

We're setting up to buy a house in a few months, so to be able to include this as part of our deposit or initial renovation/decoration cash would be preferable than to spend it on consumer good in China.

How much in Cdn?

Cowperson

[PsYcNeT]

Originally Posted by Cowperson

How much in Cdn?

Cowperson

Less than $10,000.

[Phanuthier]

Originally Posted by PsYcNeT

Less than $10,000.

Pretty sure thats fine. Make sure the mortgage bank is ok with a sudden injection of cash though. I live in the USA so laws are different, but my mortgage broker didn´t like to see large injections of cash when I was looking to get approved for my mortgage. Check with the mortgage broker before you use that for a down payment.

[PsYcNeT]

Good to know, I'm still wondering on the logistics of bringing it into the country and depositing it into my bank. I've sent an email to TD but they have yet to get back to me.

[Minnie]

Doing a little digging because I was watching the CBSA show on TV a while back that covered this a little bit and people ended up 'donating' their money to the government. Found this blurb from an alleged immigration officer:

There is no limit to the amount of currency or monetary instruments you can bring in. HOWEVER, if you are carrying the equivalent of $10000 CAD, you must declare it to CBSA. Failure to do so will mean you cross with $0 CAD and that the receiver general thanks you for the gift!

This link seems to confirm that (sort of) - http://www.cbsa.gc.ca/travel-voyage/...rc-eng.html#a7

[To Be Quite Honest]

Buy some gold!

You can receive a gift of money up to $100 000 before the Government say they are owed some of that gift... But that info was 10 years ago.

[Northendzone]

buy a whole load of chinese "cultural reading material" and some fireworks - should be no issues coming back into canada.......

[Huntingwhale]

Dont' say nothing. No one will ever find out.

[NBC]

Originally Posted by Huntingwhale

Dont' say nothing. No one will ever find out.

I think you meant "don't say anything." "Don't say nothing" is in fact a double negative, which translates to "say everything."

But I digress...

Amounts equal or greater to $10 000 CAD need to be declared.

I frequently travel between Canada and the UK and I find that having the money on me is simple enough, even in large amounts. One thing to think of is converting it whilst you are over there. You may lose out a bit on the exchange but returning to Canada with thousands of Canadian dollars might be less suspicious than thousands of RMB.

Just a thought.

[Wormius]

I have a similar problem, a stack of 100 RMB notes totalling about $5k CDN. I thought about selling it to people leaving to visit China, but that plan is starting to look prone to hassle, and it looks like RBC will buy foreign currency at a pretty respectable exchange rate.

One question is whether it should be converted into CDN and put it into a savings account, or convert it to US to have on hand when we make occasional trips to the states, which we do about twice a year.

[bizaro86]

Originally Posted by Wormius

I have a similar problem, a stack of 100 RMB notes totalling about $5k CDN. I thought about selling it to people leaving to visit China, but that plan is starting to look prone to hassle, and it looks like RBC will buy foreign currency at a pretty respectable exchange rate.

One question is whether it should be converted into CDN and put it into a savings account, or convert it to US to have on hand when we make occasional trips to the states, which we do about twice a year.

If you convert it in Canada, the bank will almost certainly charge you a spread to convert to Canadian, and then another spread to convert to USD.

[JohnnyB]

I take large cash sums back to Canada in RMB all the time. Just keep it under 10 grand Canadian and find a better place or person to change currency with than the bank. Vancouver Gold and Bullion will give much better rates than RBC, or trade with someone you trust using the midpoint of buy and sell bank rates to cut out the bank and save you both money.

[Ahuch]

I would buy a ton of stuff, I love shopping in China. You'll be fine bringing it back and converting it, though.

[Buff]

I will pass along some bank account information. You can then deposit that money into that account and you won't have to worry about the money ever again.... er, worry about carrying that much cash on you. Yeah, the last part.

[BOSSY]

I don't think you have to declare it if under &10k...

[Chingas]

You will struggle to convert the RMB to dollars in China. If you don't have a reciept that shows you either 1) withdrew it from a bank machine or 2) exchanged dollars to RMB in the first place most places will not exchange it for you.

It has something to do with the Chinese government limiting the amount of dollars exiting, and protection against people working under the table for cash and then trying to exit with dollars.

You may be able to find someone to exchange it on the grey market but you need to be very careful of counterfiet if going that option.

I would recommend taking it home and accepting the lesser exchange for the security of the transaction.