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Mexican taxation of inheritance?

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#1 Sarita

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Posted 04 March 2012 - 10:55 PM

I have a question that I don't think I have seen discussed here yet. Are inheritance funds taxed in Mexico? I am specifically referring to an inheritance from Canada. It hasn't happened yet, so this is purely speculation but curious to know what the governments position here would be.

#2 jnc

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Posted 05 March 2012 - 01:29 AM

I have a question that I don't think I have seen discussed here yet. Are inheritance funds taxed in Mexico? I am specifically referring to an inheritance from Canada. It hasn't happened yet, so this is purely speculation but curious to know what the governments position here would be.


I am not a tax attorney and would certainly like to hear from one on this. However, I would strongly suspect that if the money inherited stayed in Canada, subject to your periodic withdrawal through an ATM, it would be no different that any other source of money you have in Canada and it would not even come to the attention of the Mexican tax authorities. It would, of course, be subject to whatever tax Canada places on inheritances. Again, this is an educated guess rather than any kind of official knowledge.

#3 traderspoc

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Posted 05 March 2012 - 01:01 PM

mexico does not tax worldwide income of temporary residents.

inheritance is not taxable income, unless from a taxable event in country received or over a maximum threshold amount

"what happens in Canada stays in Canada"

#4 Ajijic

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Posted 05 March 2012 - 03:08 PM

I believe Mexico requires full time residents to report worldwide income, annually. I am sure there are people more knowledgeable on this subject.


http://www.taxmeless.com/MEXICO.htm

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#5 Ferret

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Posted 05 March 2012 - 06:32 PM

This requires enlisting the services of a tax accountant.

But, it depends on your citizenship and the citizenship of the person leaving the money. The person leaving you the inheritance will have to have a final tax return filed in Canada if they are a Canadian citizen THEN you get your inheritance.
If you are Canadian citizen, then where you put the money and what you do with it is up to you but if you file your tax returns in Canada then you will report income earned on the money no matter where it is.
If you are a MEXICAN citizen and you leave the money in Canada then you are obligated to report income earned worldwide when you file your Mexican tax return.
The above comments are very general.

#6 Sarita

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Posted 05 March 2012 - 08:27 PM

This requires enlisting the services of a tax accountant.

But, it depends on your citizenship and the citizenship of the person leaving the money. The person leaving you the inheritance will have to have a final tax return filed in Canada if they are a Canadian citizen THEN you get your inheritance.
If you are Canadian citizen, then where you put the money and what you do with it is up to you but if you file your tax returns in Canada then you will report income earned on the money no matter where it is.
If you are a MEXICAN citizen and you leave the money in Canada then you are obligated to report income earned worldwide when you file your Mexican tax return.
The above comments are very general.


Hmmm... that will be one hell of a seance! Will I need to have a tax attorney present for it? :P

Canada always did like to make it tough on people, this is obviously no exception.

#7 Ajijic

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Posted 05 March 2012 - 09:09 PM

This has nothing to do with Canada. Mexico states all residents must report worldwide income. Is that not the answer to the question originally posted? That does not assume you are taxed on it, simply stating it must be reported.

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#8 Ferret

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Posted 06 March 2012 - 12:18 AM

All CITIZENS not residents must report their world wide income. Those who are just permanent residents but not citizens must report and pay taxes on income earned IN MEXICO.

#9 Ajijic

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Posted 06 March 2012 - 10:23 AM

From the web site I posted above and found in other places:

Mexican tax law also provides that if you make Mexico your home, you must report your worldwide income each year on your Mexican income tax returns filed with the "Hacienda" which is the same as the U.S. IRS.

Mexico taxes it residents on worldwide income pursuant to Article 1 of the income tax law. It is important to note that Mexico allows for a foreign tax credit for any taxes paid outside of Mexico. The US and Canada also allow for foreign tax credits. In effect, the taxpayer will pay taxes in both countries, but will also have offsetting tax credits. The net result is that the taxpayer usually pays an amount of taxes equivalent to the highest tax bracket among both countries.

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#10 Ferret

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Posted 06 March 2012 - 01:42 PM


Hmmm... that will be one hell of a seance! Will I need to have a tax attorney present for it? :P

Canada always did like to make it tough on people, this is obviously no exception.


This is getting to be a kinda funny thread. Having just gone through all this stuff a couple of years ago when my mother passed away...The Power of Attorney is the one who makes sure the final tax return is done...got it? No seances required.

Ajijic...that website has very outdated information. The Capital Gains info is totally wrong and outdated. And, the information that they do provide is with regards to Americans, the IRS and Hacienda.
In the original OP, it stated that the inheritance would be received from a Canadian source. There is no further info...like the citizenship of the person inheriting, where they reside etc. etc.
The information that I posted was from our own personal experience as full time residents of Mexico who are Canadian citizens who received an inheritance from a Canadian citizen who resided full time in Canada.
There are many computations of that last sentence and as many variables and I suggest that the OP get PROFESSIONAL ASSISTANCE to see which shoe fits.




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