Automotive

Gift a car to my son in BC?

  • Last Updated:
  • May 30th, 2020 1:01 am
Tags:
[OP]
Newbie
May 25, 2020
2 posts

Gift a car to my son in BC?

My son lost his job amid COVID, and we would like to gift him a vehicle because his current one is a safety hazard. We would buy a new vehicle from a GST registered dealership and pay all applicable taxes. My son is coming out for his birthday and we would surprise him with the vehicle, which he would then drive back to BC and register there. We would gift him the vehicle, meaning, that he would not give us anything in return for the vehicle. I THINK this means that upon registration he would not have to pay any PST because the Bulletin on PST listed on BC's website says the following:

If you receive a vehicle as a gift, you are exempt from paying PST on the vehicle if the person
who gave you the vehicle (the donor) is a related individual to you and the donor:
 paid an applicable tax or another province’s sales tax on the purchase of the vehicle and
has not received and is not eligible for a refund, credit or rebate of that tax, including input
tax credits,


So, we paid the applicable tax in our province. However, on the actual form FIN 319 that we would fill out the tick box we would check to verify we paid all the taxes upon purchase says "Sales tax in another province (GST is not a qualifying tax)" But AB doesn't have any PST.... so is this law specifically designed to punish Albertans or something? I am a little lost. As a GIFT I don't want to burden my son with a couple grand in PST, and I don't want to pay that PST either. The BC government does nothing for me. I am happy to pay into Alberta's floundering and poorly managed economy, but not BCs! Haha. Sarcasm at the end here. But genuinely wondering if this Gift process between direct family members will avoid the PST requirement or not.
8 replies
Deal Addict
User avatar
Mar 4, 2007
1949 posts
270 upvotes
Vancouver
Hi,

Shouldn't the car be register to him in Alberta? When he get home in B.C., re-register his car with B.C. registration & plates. There shouldn't be any transfer taxes because he already owns the car.
Deal Addict
May 16, 2017
1162 posts
1316 upvotes
Fraser River Rat wrote: Hi,

Shouldn't the car be register to him in Alberta? When he get home in B.C., re-register his car with B.C. registration & plates. There shouldn't be any transfer taxes because he already owns the car.
Nope - that would be an attempt at skirting the BC tax laws on out-of-province vehicles. Would only work if a non-BC resident and moving to BC.

"If you are a BC resident and you purchase a vehicle outside BC and then bring, send or receive delivery of the vehicle in BC, you must pay PST on the depreciated purchase price of the
vehicle (see Depreciated Purchase Price below), unless a specific exemption applies. If you received a vehicle as a gift, see Vehicles Received as a Gift below."

https://www2.gov.bc.ca/assets/gov/taxes ... hicles.pdf

AB doesn't get an exemption because there is no PST paid in Alberta - and BC requires that PST be paid and merely gives a credit if it is paid in another jurisdiction.

There was a previous discussion on this, where the answer was:

"You won't be able to "Gift" the vehicle from AB to BC <to avoid BC PST> because the BC tax rules changed a few years ago. There are some exceptions but never for AB cars because BC only allows <tax-exempt> inter-provincial gifts when the gift giver can prove that they paid a qualifying tax; in this case since there is no PST in AB, there is no way to meet that requirement."
Deal Fanatic
Sep 1, 2004
5397 posts
4063 upvotes
alexrogansbeta wrote: But AB doesn't have any PST.... so is this law specifically designed to punish Albertans or something? I am a little lost. As a GIFT I don't want to burden my son with a couple grand in PST, and I don't want to pay that PST either. The BC government does nothing for me. I am happy to pay into Alberta's floundering and poorly managed economy, but not BCs! Haha. Sarcasm at the end here. But genuinely wondering if this Gift process between direct family members will avoid the PST requirement or not.
I assume your son has declared as a BC resident already and pay into BC income tax?

If not declaring will have a 1 time exemption.

Also, don't take another province's law so personal. Not everything is against Albertans, even if our premier love to bang that drum. It's just closing tax loopholes. Although I understand BC has not been the best partner the last few years.
[OP]
Newbie
May 25, 2020
2 posts
Thanks for the level headedness Xtrema haha.

Yes, he is a BC resident. That being said, I see that PST exemptions exist for new and returning BC residents who can show that they have owned a vehicle in another province for at least 30 days. It would be real easy for my son to come back to AB one weekend, get his AB license again and register the car here. He can then drive it in BC with an AB license and AB plates indefinitely because he is a student (at least until his student ID expired). So, he could look into swapping back to BC plates and BC license in like December or something. At which point he'll be a "returning" BC resident and exempt cause he'll have owned the car for 30 days outside of BC?
Deal Addict
User avatar
Jul 26, 2007
4812 posts
2349 upvotes
Toronto
Regardless what you do, just register the car under his name at the dealer to save an extra step of transferring/gifting that would require an extra fee ($20 in Ontario for notarization + $10 new ownership)
Deal Fanatic
Sep 1, 2004
5397 posts
4063 upvotes
alexrogansbeta wrote: Thanks for the level headedness Xtrema haha.

Yes, he is a BC resident. That being said, I see that PST exemptions exist for new and returning BC residents who can show that they have owned a vehicle in another province for at least 30 days. It would be real easy for my son to come back to AB one weekend, get his AB license again and register the car here. He can then drive it in BC with an AB license and AB plates indefinitely because he is a student (at least until his student ID expired). So, he could look into swapping back to BC plates and BC license in like December or something. At which point he'll be a "returning" BC resident and exempt cause he'll have owned the car for 30 days outside of BC?
I don't think that will fly. But I am not 100% sure. I think you may want to make sure what returning BC resident means. I am sure its not a weekend. He probably need to declare himself as AB resident again and pay AB income tax for 6+ month and go back before that qualifies.

Otherwise, it sounds like another huge skipping PST loophole.
Deal Addict
May 16, 2017
1162 posts
1316 upvotes
alexrogansbeta wrote: Thanks for the level headedness Xtrema haha.

Yes, he is a BC resident. That being said, I see that PST exemptions exist for new and returning BC residents who can show that they have owned a vehicle in another province for at least 30 days. It would be real easy for my son to come back to AB one weekend, get his AB license again and register the car here. He can then drive it in BC with an AB license and AB plates indefinitely because he is a student (at least until his student ID expired). So, he could look into swapping back to BC plates and BC license in like December or something. At which point he'll be a "returning" BC resident and exempt cause he'll have owned the car for 30 days outside of BC?

You think you're the first one to try to avoid PST on vehicles in BC by buying in Alberta? Why do you think they keep changing the PST reg's every few years to close the loopholes? Technically, students now need an exemption permit for their out-of-Province registered vehicle - which means reporting it to ICBC - and raising some flags.

Top