On November 18, 2015, the Canada Border Services Agency issued D-Memorandum D-2-1-5 “Bequests – Tariff Item No. 9806.00.00”. In this D-Memorandum, the CBSA sets out the rules applicable when using Customs Tariff Code 9806.00.00 to import goods that have been bequested or are a gift in anticipation of death on a duty-free basis. Generally speaking, goods are to be classified according to their applicable H.S. Code. However, if the good is a bequest or a gift in anticipation of death, the importer may use Customs Tariff Code 9806.00.00 and import the good customs duty free and GST/HST free.
The words of Tariff Item No. 9806.00.00 will be strictly construed by the CBSA:
“Personal and household effects of a resident of Canada who has died, on the condition that such goods were owned, possessed and used abroad by that resident;
Personal and household effects received by a resident of Canada as a result of the death, or in anticipation of death of a person who is not a resident of Canada, on condition that such goods were owned, possessed and used abroad by that non-resident;
All the foregoing when bequeathed to a resident of Canada.”
As a result, the relevant criteria are:
- The recipient/importer is a resident of Canada;
- The goods have been bequethed or transferred in anticipation of death; and
- The goods are personal and household effects
- (i) owned, possessed and used abroad by a resident of Canada who has died; or
- (ii) received by a resident of Canada as a result of the death, or in anticipation of death of a person who is not a resident of Canada, on condition that such goods were owned, possessed and used abroad by that non-resident.
Only goods considered as being “personal and household effects” are eligible for duty- and tax-free importation under the provisions of Tariff Item No. 9806.00.00. “Personal and household effects” may include such things as furniture and appliances; family heirlooms; antiques; musical instruments; jewellery; personal collections of coins, stamps or art; hobby items; and conveyances such as motor vehicles, boats and motors, trailers and aircraft. In addition, these goods must have been owned, possessed and used abroad by the donor.
The CBSA identifies a few areas of ineligible goods. Houses, buildings and large trailers used as residences, any goods that are commercial in nature, and any goods that were used by the donor in connection with a business or for commercial purposes do not qualify as personal and household effects under tariff item No. 9806.00.00. Goods that were rented or leased by the donor are not considered to have been owned and do not meet the ownership requirement of Tariff Item No. 9806.00.00. There are also restrictions on the importation of certain goods into Canada such as alcoholic beverages, tobacco products and other goods that do not meet the “use” requirement and are not eligible for importation under the provisions of Tariff Item No. 9806.00.00. Import restrictions (e.g. obscene materials, guns, explosives, food, plants, animals vehicles, etc.) will continue to apply.
The CBSA will request the following documentation if the donor is deceased:
- (i) a certified true copy of the death certificate is also required; or
- (ii) When there is no will, the following documents may also be used:
- (a) documents issued by a probate court; or
- (b) a statement from the executor or executrix or a legal representative who is authorized to divide the assets or interests of the deceased person’s estate.
For a good to be considered to be a “gift in anticipation of death”, the CBSA required that death be imminent. The CBSA will ask for the following documentation:
- (i) a copy of the donor’s will; and
- (ii) a written testimony from the donor’s physician that the donor’s death is imminent.
If the bequest is currency, the normal reporting rules with respect to monetary instruments in excess of $10,000 will apply. If the bequest includes an old coin collection, it will be necessary to obtain appraisals prior to importation in order to provide approximate values in the reporting.
If you are arriving with a truck or carload of goods, it would be best to prepare a list of all the goods to be imported into Canada, giving descriptions and approximate values. This will assist with the process of completing the necessary documentation and forms.