Helping Your Kids? CRA Takes a Cut

Helping your family should not create a tax problem. But in Canada, that is not always the case.In this episode of The Advisors Table, we discuss how ordinary family decisions — gifting money, transferring property, helping a child invest, or using a shareholder loan — can trigger serious and often unexpected tax consequences.In this episode, we break down:• Why helping your kids can trigger tax for you — not them• How attribution rules apply to children under 18• The difference between gifts and loans — and why it matters• Section 56 family loan rules for adult children• Why gifting a cottage or property can trigger immediate capital gains tax• Corporate loans to children and the one-year repayment trap• Why down payments labeled as “gifts” may not actually be gifts• Practical ways to help your kids without funding CRAUnderstanding the system before you act is how you protect your family’s wealth.Links:We Can’t Build Affordable Housing While Taxing It Like A Luxury TaxLooking for trusted tax advice?Connect with Sankalp (Sunny) Jaggi at Cedar Consulting Group.Email: [email protected]: cedargroup.caSubscribe if you want practical breakdowns of real tax scenarios.Have you ever been surprised by a tax consequence after trying to help family? Share your experience below.Timestamps:00:00 – Gifting money to kids & grandparents: why attribution rules exist05:40 – How attribution really works and why families usually miss it11:30 – When the child turns 18: new traps, loans vs. gifts and paperwork mistakes16:40 – Gifts to adults vs. minors: different rules, same audit risk22:40 – Registered options for families (RESP, TFSA, RRSP) — what actually helps28:50 – Documenting gifts and loans properly (what auditors look for)34:00 – Corporate money for children: why business owners get stuck38:40 – Shareholder loans vs. employee loans — where people cross the line43:30 – Shareholder loans and double taxation explained step-by-step48:50 – Why auditors focus so heavily on shareholder loans54:30 – Income-splitting rules for business owners (and why they fail so often)58:30 – The 20-hour rule and other carve-outs that actually work1:01:00 – Real case: gifting property to a grandchild → double capital-gains tax1:06:40 – Principal residence exemption and why it doesn’t always save you1:09:40 – Final warnings, planning checklist, and closing thoughts