Years ago my mother invested some money I made doing some acting as a kid in a bank account in New Zealand under her name. Both her and I live in Canada. We are both also Canadian/New Zealand Citizens. I do not believe I have ever held a New Zealand bank account or anything of the sort in my life.

Now she wants to give it back to me and I plan to use it to fund travel to NZ and then keep the leftovers (if any) in my normal accounts located in Canada (where I live, work and pay taxes).

I feel that the easiest thing logistically-speaking would be for her to transfer the money from the NZ account in her name into my Canadian account directly (via e-transfer maybe?). I'm not sure about the tax implications of this, OR how either of us would go about reporting it. Ideally I don't want to "ding" her for any taxes or fees and I'd prefer to avoid paying them as well.

Various things I have considered as options:

  • Is a direct transfer the best idea?
  • Will there be currency conversion fees?
  • There was some interest earned on the money while it was in the account in NZ. Will either of us have to pay taxes on that? NZ taxes or Canadian taxes?
  • Should I open a NZ bank account and transfer it there and then use THAT to pay for all NZ-related travel expenses and transfer the balance to my Canadian account at the end of the trip?
  • Would it be "better" for HER to use that money to buy the plane tickets for us (hubby and I) and thus reduce the "amount of money" actually transferred?

I do not know what kind of account/investment it is currently in. She says it is in a "lottery" account but I have NO idea what that means.

What is the best method for me to get the money and minimize fees and taxes for both of us?

Edit: What if I just get her to put it into a PayPal account and then hand me the username and password?

  • 1
    Within NZ, there is an annual limit for gifting, above which it is taxed. I don't know whether it is the same between countries though. Even if there were no currency conversion "fees", there is a still a difference between the buy and sell price, so it does cost you to convert between currencies. – Highly Irregular Sep 18 '17 at 23:09
  • In Canada there is no gift tax, however there may be some outstanding taxes owed by whoever is deemed the 'beneficial owner' of the account, for the time it was accruing interest/income in NZ. ie: if your mom considers it to be her account, she should have included any interest income earned on her Canadian tax returns every year. If it is considered beneficially your account [not sure how hard it would be to argue that it was your money given you earned it; probably very hard particularly with you presumably being a minor when this all started], then you should have included the income. – Grade 'Eh' Bacon Sep 19 '17 at 13:29
  • @Grade'Eh'Bacon she is screwed then. Her taxes are so messed up just on the canadian side that I HIGHLY doubt she has even considered the interest as something that should be reported. I don't think anyone could say that I should have included it on income as she kept the account secret from me for years beyond saying "I have some money saved for you to travel to NZ with" and refused to tell me the amount or even hand it over to pay for schooling (which forced me to take a student loan). She doesn't even know what bank it is in as her brother is "taking care" of it. T.T – BunnyKnitter Sep 19 '17 at 15:39
  • @HighlyIrregular - when you say taxed... taxed in NZ? Paying the NZ version of the CRA the taxes? How would one even go about DOING that? Do you think it would be better to not deal with the currency conversion and open a NZ bank account, transfer it to my name there and then use it that way (at least until the end of the trip at which point there will be much less to be transferred back to CAD)? – BunnyKnitter Sep 19 '17 at 15:43
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    Last time I bought some, Air NZ tickets could be purchased using online banking using a payment method called POLi that ensures the payment goes through. If you get a NZ bank account, I recommend Kiwibank which is a govt owned one. – Highly Irregular Sep 20 '17 at 2:07

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