When I was growing up it was common to receive a Canada Savings Bond from a grandparent as a gift on your birthday or for grading. Since Canada Savings Bonds have been phased out, a reader wondered can I give an investment as a gift?
In Canada it is legal to gift stocks, bonds and other securities. They must be transferred from one person to another and classified as a gift. However, depending on the type and value of the security involved the gift giver may have to pay capital gains tax.
As there is no gift tax in Canada the receiver of the securities does not need to declare the securities as income.
How the receiver will hold the given securities must also be taken into account. As we stated in a previous blog post, to open an RRSP or TFSA in Nova Scotia you must be the age of majority, which is 19. If the receiver is not old enough to open an account to hold the securities they may need to be held in trust by a parent or guardian.
Before making any decisions about gifting a security you should contact a lawyer, estate planner or tax expert.