Inheriting Money or Property from Abroad: A Practical Guide for Global Beneficiaries
Receiving an inheritance from abroad can feel like a welcome windfall—but it often comes with hidden tax implications, paperwork, and cross-border complexity. This guide breaks down what you need to know if you live in one country and inherit from another.
1 | Two Tax Systems Are in Play
When you inherit across borders, both the estate’s country and your country can claim a slice—just in different ways:
- Estate / donor country: May apply inheritance tax before assets leave.
- Beneficiary’s country: May tax future income earned from those assets.
2 | How Canada Handles an Inheritance
- No tax at receipt – inheritances are not taxable income.
- Deemed disposition – capital gains are taxed inside the estate.
- Cost base resets to fair market value on date of death.
- Future income (dividends, rent) is taxable.
- Foreign-asset reporting (Form T1135) if assets exceed $100 000 CAD.
3 | Key Documents to Collect
- Probate grant: Proof of inheritance and value at death.
- Foreign tax clearance: Shows tax paid abroad.
- Wire transfer records: Document when and how you received funds.
- Exchange-rate source: For accurate currency conversion (e.g., Bank of Canada).
4 | Currency & Bookkeeping Tips
- Record date, amount, exchange rate, and purpose in a spreadsheet.
- Use fair-market value for inherited property or shares.
- Attach professional valuations to your file.
5 | Checklist Before You Sell or Reinvest
- ☐ Filed Form T1135 (Canada) or equivalent?
- ☐ Stepped-up cost base applied?
- ☐ Understood withholding tax on dividends or rent?
- ☐ Considered timing for currency swings vs. gains?
6 | Bottom Line
Cross-border inheritances are rarely taxed when received—but they create ongoing reporting and tax obligations. Address these early to avoid penalties and stress later.
Need personalised help? Book a consultation— we coordinate with global tax experts so you can focus on what matters: building your future.
(This guide is for general information and does not replace tailored tax advice.)