🇨🇦 Canada · 5 min read · Published 2026-09-07 · Updated 2026-09-07

Written by Jordan Reeves · Editorial review: automated source and figure checks (how we check this)

Sources last verified: 2026-09-07

Is There a Gift Tax in Canada?

No. Cash given to an adult child is not taxed to either of you, and no return reports it. Gifting property is different: you are treated as having sold it at fair market value, and any accrued capital gain becomes taxable to you in that year.

60-SECOND ANSWER

Canada taxes no gift of cash, but gifting property triggers a deemed disposition at fair market value for the giver.

The answer:: Cash gifts are untaxed and unreported. There is no gift tax and no annual exclusion to track.
The trap:: Gifting appreciated property. You are deemed to have disposed of it at market value and pay tax on the whole accrued gain.
The recommendation:: Gift cash rather than securities where you can, because the recipient then acquires the asset at today's price with no inherited gain.

Jump to the detail ↓

Where the AI summary above gets this wrong

"You can gift up to a certain amount each year before gift tax applies."

That's surface-true. Here's what it misses:

That is a United States rule — Canada has no gift tax and no annual exclusion. A cash gift of any size is untaxed to both giver and recipient.
Property is treated as sold — A gift of shares or real estate is a deemed disposition at fair market value, so the accrued gain is taxed to the giver immediately.
Minor children trigger attribution — Income earned on money gifted to a child under eighteen is generally attributed back to you, though capital gains are not.

→ See what an accrued gain costs to realise

01 Why cash is simple

There is no gift tax in Canada and no reporting requirement for a gift between individuals. Money given to an adult child is not income to them and not deductible to you, and neither return mentions it.

The absence of an annual exclusion is what confuses people, because the widely quoted figure comes from United States law. No Canadian threshold exists, because no Canadian gift tax exists to have a threshold.

Source: Capital gains (line 12700)

02 Why property is not

Gifting property is treated as a disposition at fair market value. Shares bought for twenty thousand dollars and worth eighty are treated as sold for eighty, and the sixty thousand dollar gain is taxed to you in the year of the gift.

The recipient acquires the property with a cost base equal to that same market value, so the gain is not passed on. Where the point is to help a child, giving cash and letting them buy achieves the same result without accelerating your own tax — the base rules are in tracking adjusted cost base.

WORKED EXAMPLE · Try the numbers

Shows: what a given amount of additional taxable income costs you in tax at your marginal rate, and what you keep. Ignores: provincial surtaxes, credits that phase out with income, and any effect on income-tested benefits.

Amount ($)

Your marginal rate (%)

What you keep after tax

$6,700

At a 33% marginal rate, $10,000 costs $3,300 in tax and leaves $6,700.

Source: Capital gains (line 12700)

03 The rules that apply to minors

Money gifted to a child under eighteen carries attribution: interest and dividends earned on it are taxed in the giver's hands rather than the child's. Capital gains are the exception and are taxed to the child.

Attribution does not apply to gifts to adult children at all, nor to contributions to a Registered Education Savings Plan, which is why the RESP is the standard route for money intended for a minor — the grant structure is in maximising the education grant.

Documenting a gift as a gift also matters where the child is married. A gift received during a marriage is treated differently from a loan in most provincial family law regimes, and a written note at the time is what distinguishes the two if the marriage later ends.

Source: Canadian income tax rates for individuals

The instinct to gift the appreciated stock rather than the cash is exactly backwards. It feels tidier to hand over the shares, and it converts a gift into a tax bill for the giver in the same year, for no benefit to anyone.