BEQESTS OF FARM PROPERTY

In Canada special rules apply to farm property passing to a beneficiary who is a child, grandchild, or great-grandchild of a deceased person. If you making transfers after 1983, the definition of a “child” of a taxpayer includes a person who was, at any time before he attained the age of 19 years, wholly dependent on the taxpayer and under the taxpayer’s custody and control. This rules apply if the following conditions exists:

1 The farm land must be in Canada.
2 The property must be land or depreciable property.
3 The beneficiary must have been living in Canada before the death of the person.
4 Before the taxpayer’s death, the property was used principally in a farming business on a regular and continuous basis.
5 The property must vest indefeasibly in the beneficiary within 36 months after the death of the person except minster permission.

Property leased by a taxpayer to his or her family qualifies for the tax free transfer. Revenue Canada rules change all the time so it is always good idea to make sure with revenue Canada before you proceed.

Similar rules applies to fishing property.