In Canada, how much money can I gift a friend or family member without them being taxed on it?
Canada doesn't seem to have a gift tax. http://www.taxtips.ca/personaltax/giftsandinheritances.htm "When you give a gift to another person or receive a gift from another person there is no impact on your taxes. You do not have to report certain amounts in your income, including the following: ...   -most gifts and inheritances; http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/nttxd-eng.html If you give a gift to a charity or similar organization you can reduce your taxes. It is my recollection that when a family member gives a large amount of money to a child, tax on the income that money earns (typically interest) should be paid by the giver, not the child, but I can't find any publications to that effect on the CRA Site. There is a bit of language about ""Gifts"" from an employer that are really employment income: Gifts and other voluntary payments 1.3 The term gift is not defined in the Act. In common law jurisdictions, the courts have said that a bona fide gift exists when:   •There is a voluntary transfer of property,   •A donor freely disposes of his or her property to a donee, and   •The donee confers no right, privilege, material benefit, or advantage on the donor or on a person designated by the donor. 1.4 Whether a transfer of property has been made voluntarily is a question of fact. In order for a transfer to be considered voluntary, there must be no obligation to make such a transfer. Amounts received as gifts, that is, voluntary transfers without consideration and which cannot be attributed to an income-earning source, are not subject to tax in the hands of the recipient. 1.5 However, sometimes individuals receive a voluntary payment or other valuable transfer or benefit by virtue of an office or employment from an employer, or from some other person. In such cases, the amount of the payment or the value of the transfer or benefit is generally included in employment income pursuant to subsection 5(1) or paragraph 6(1)(a). (See also Guide T4130, Employers’ Guide - Taxable Benefits and Allowances.) Similarly, voluntary payments (or other transfers or benefits) received by virtue of a profession or in the course of carrying on a business are taxable receipts. http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s3/f9/s3-f9-c1-eng.html#N10244 If the people in question are adults who are not related to each other and don't have a business or employment relationship, then you should find that regardless of the amount of the gift, neither giver nor recipient will have a tax consequence." If the person gifting the property owed any debt to Canada Revenue Agency on the date of gift, you may getting a nice letter from Canada Revenue Agency advising you to settle the donor's tax liability with the property gifted.
"The IRS definition of gift you quoted has ""full consideration ... received in return"". If your friend's help is not contingent upon your monetary offer (as is the case in all your scenarios I believe?), then it shouldn't be viewed as consideration in return of your money, right?" From an India gift-tax point of view, you can receive unlimited funds from close relatives. So if you are getting this from your Father's Brother or Mother's Brother; then it is not taxable. It is a good idea to document this if the amount is large. It serves as record for future. This can be a simple piece of paper or something that's type on Notarized document. The way I have seen this done in the past is the business will withhold taxes on the amount of the gift.  Very much like receiving a bonus.  There are probably other ways to do it where taxes are avoided like you boss could buy the gift for you personally.  Not sure about all the legal ways to avoid taxes on this. "Can I teach children an invaluable skill for free and provide a website or PayPal link for anyone who appreciates the result of my gift to their child and wishes to gift me money (or maybe they don’t have a child but believe in my revolutionary contribution to the future) as they see fit, up to $10K? Two immediately obvious problems with this strategy: What about when you receive gifts from people who aren't in the US? You have to declare, and pay taxes on, foreign gifts. It seems to me that these may not be gifts because they are given in connection with the service you provided rather than from ""detached and disinterested generosity"" as required to make the gift tax exempt. (See Commisioner v. Duberstein -- gift given to thank associate for a sales lead did not arise from detached generosity. See Stanton v. United States -- gift given in appreciation of services rendered may or may not be a gift for tax purposes. See also Bogardus v. Commissioner -- gifts inspired by past service can be tax exempt.)" "Am I right to say that no tax needs to be given for the annual ~$130k   USD, since they are considered as annual gift tax exclusion? Not only that you're wrong, but it also looks like a tax fraud, not just mere avoidance. You'll have hard time proving to any judge or jury that the gifts are ""in good faith"". By the way, $5 a month is below minimum wage." For cross-border transactions like this you should really take advice from an accountant or lawyer who specialises in them, because there may be tax treaties between the two that complicate the situation. However, in general borrowing money doesn't have tax implications in itself, and there's no limit as such. You do need to consider the following points: If this is zero or less than you could plausibly get commercially, your friend is effectively giving you the difference between the interest rates. If your friend in Korea has a connection to the US she or he may be subject to the gift tax. In practice this only matters if the total amount of gifts they give to anyone over their lifetime plus the size of their estate over their lifetime is large. Non US-persons are exempt though if the amounts are large enough they may need to be reported. Financial institutions are generally required to report large international transactions (typical thresholds are around $10,000) for scrutiny by the government, in case the transaction is related to something illegal. This shouldn't be a problem in itself but you should be aware it'll happen. It shouldn't make any difference how you transfer the money, but it would be wise to get as much documentation as possible in case of later questions. The best place to get further advice would be the US bank you'll be transferring the money into initially. This is really a question for a lawyer given the cross-border nature of the transaction, but you and your friend should sign a contract specifying how and when the loan will be repaid. Your friend should also consider setting up the loan as a mortgage and taking a charge on your home. Even if your friend trusts you, a charge on the home will protect him or her in the event of you having financial problems and another creditor laying claim to the home. I'm not familiar with US tax law in particular, but the general principle around the world tends to be that interest-free or low-interest loans are taxed as gifts of the difference between a commercial interest charge and the actual interest charged. You could also forgive ($13,000 - waived interest) of the loan each year. Also, remember that there's a lifetime exemption (covering inheritance as well) of $1,000,000 which can be used for any amounts over the $13,000. "I'm guessing since I don't know the term, but it sounds like you're asking about the technique whereby a loan is used to gather multiple years' gift allowance into a single up-front transfer. For the subsequent N years, the giver pays the installments on the loan for the recipient, at a yearly amount small enough to avoid triggering Gift Tax. You still have to pay income tax on the interest received (even though you're giving them the money to pay you), and you must charge a certain minimum interest (or more accurately, if you charge less than that they tax you as if the loan was earning that minimum). Historically this was used by relatively wealthy folks, since the cost of lawyers and filing the paperwork and bookkeeping was high enough that most folks never found out this workaround existed, and few were moving enough money to make those costs worthwhile. But between the ""Great Recession"" and the internet, this has become much more widely known, and there are services which will draw up standard paperwork, have a lawyer sanity-check it for your local laws, file the official mortgage lien (not actually needed unless you want the recipient to also be able to write off the interest on their taxes), and provide a payments-processing service if you do expect part or all of the loan to be paid by the recipient. Or whatever subset of those services you need.  I've done this. In my case it cost me a bit under $1000 to set up the paperwork so I could loan a friend a sizable chunk of cash and have it clearly on record as a loan, not a gift. The amount in question was large enough, and the interpersonal issues tricky enough, that this was a good deal for us. Obviously, run the numbers. Websearching ""family loan""  will find much more detail about how this works and what it can and can't do, along with services specializing in these transactions. NOTE: If you are actually selling something, such as your share of a house, this dance may or may not make sense. Again, run the numbers, and if in doubt get expert advice rather than trusting strangers on the web. (Go not to the Internet for legal advice, for it shall say both mu and ni.)" "Within Canada, to send money to a friend online, you'd typically use the Interac e-Transfer service offered by most Canadian banks & credit unions. Here's a list of those that support it. My bank charges $1.50 to send money via Interac e-Transfer, and zero to receive. Charges are likely to vary by bank. FWIW, Interac is a not-for-profit organization & network founded about 30 years ago by some major Canadian banks to facilitate ATM, debit, and other electronic financial transactions within Canada. It's also possible at some banks to set up another person's bank account as a ""personal payee"" — at which point the account becomes available as a bill payment candidate in your online banking. I know at least three of the ""Big Five"" banks have this functionality. I use it at my own bank, but only for payees who also bank at my institution, and I'm not sure if it works between banks. You'll need to ask your candidate banks if they have such a feature, and whether it costs anything. The nice thing about the ""personal payee"" functionality is that, at least at my bank, there's no cost, so for recurring transfer scenarios it can keep costs down. To send payments outside of Canada, wire transfers remain an option – but doing so through a Canadian bank may be expensive. There exist some non-bank wire transfer providers that have more competitive fees and exchange rates.  PayPal remains an option as well." "I transfer all their funds to my bank account Are they paying tax on that transfer?  Gifts under $14,000 are excluded from taxation in the US, but they're going going to have a hard time arguing that it is a gift (since they expect it back).  The taxes are almost certainly going to exceed the amount you can make from your investments in the short term, and if they aren't paid then your ""clients"" are going to be in hot water with the IRS. You need to have something set up that establishes you as merely managing the funds, and not receiving them personally as a transfer.  The other answers have good suggestions." "I can't vouch for Australian law, but in the US there is actually a recognized mechanism for ""in-family loans"" which ensures that it's all fully documented for tax purposes, including filing it as an official second mortgage. (Just did that recently in my own family, which is why I'm aware of it.) We're required to charge at least some interest (there's a minimum set, currently around 0.3%), and the interest is taxable income, and it is wise to get a lawyer to draw up the paperwork (there are a few services which specialize in this, charging a flat fee of about US$700 if the loan is standard enough that they can handle it as fill-in-the-blank), but outside of that it's pretty painless. This can also be used as a way of shifting gift limits from year to year -- if you issue a loan, and then gift the recipient with the payments each year (including the payments), you've effectively spread the immediate transfer of money over multiple years of taxes. Of course it does cost you the legal paperwork and the tax in the interest (which they're still ""paying"" out of your gift), but it can be a useful tool, and it's one that wasn't well known until recently. Again: This is all US codes, posted only for comparison (and for the benefit of US readers). It may be completely irrelevant. But it may be worth investigating whether Oz has something similar." As I understand it, US federal gift tax doesn't kick in at all until one person gives more than about $14,000 in a single year. (So a couple can give someone $28,000.) If you want to give more than that in a lump sum while avoiding gift tax, one workaround is to structure it as an intra-family loan. Basically, you write (and formally register) a loan for the amount, then gift them with up to the limit for them to pay off that loan. The IRS requires that you charge interest on this loan, but the rates are pretty minimal and of course you can incorporate that in the gift. The downside is that the interest income you're required to take is taxable, but that's a comparitively small sum. (On the other hand, if the loan is a mortgage against real property, and properly filed as such, the interest paid may be deductable for the person you're giving the money to.) Doing this properly requires a tax accountant or lawyer who has a clue about the right legalese to make it work. However, there are starting to be some services which specialize in this, doing it for a fixed fee. I used one of those recently, which is why I'm somewhat familiar with this process; they made it about as much of a fill-out-the-forms process as they could, but it still took a few weeks for me to figure out which options were best for my needs. Let's define better the situation and then analyze it: Start with: End with: Process: So B has the same amount of money, just in a different bank account, but A and C changed states. A now doesn't have money, and C does, as the result of the transaction between A, B and C. The gift tax issue I see is the transfer of money from A (you) to C (your brother). If you're a US tax resident then you have $14K exemption from gift tax per person per year. £20K is more than that, so it will be subject to the tax. The fact that a third person was involved as an intermediary is irrelevant - for the purpose of gift tax there's no distinction between using a bank for transfers or a private party. Keep in mind that paying tuition directly to the institution on behalf of your brother may help you mitigate your gift tax liability - tuition payment made on behalf of your brother is exempt from gift tax. But it has to be made directly to the institution, it cannot pass through your brother. Gift tax is not an issue here. If a U.S. Person were to receive the wire transfer for me, and then immediately transfer the money to me This is a classic money laundering/scamming technique. You and your friend may end up talking to the FBI, not the IRS. As far as I know (I am not a tax professional or IFA!) there would be no tax implications or other burden on the recipient of the loan under UK law, even if it ended up being treated as a gift rather than a loan. There are no clauses about money being in the account for 90 days in UK housing transactions, however under money laundering rules your brother's solicitor might need sight of loan agreements to verify where the funds came from (I think it would depend on whether you paid the money to your brother direct, in which case there would be no problem, or if you paid it direct to the solicitor for the purchase). What Canadian law might say about capital gains / inheritance tax (if the Canadian IRS did decide the loan counted as a gift) I have no idea.