Gift of a Used Road Vehicle
Used road vehicles supplied by way of a gift between related individuals are generally not subject to the GST/HST.
However, used road vehicles that must be registered under the Highway Safety Code and that are supplied by way of a gift are, as a rule, taxable under the QST system at the rate of 9.975%. The QST must be calculated on the vehicle's estimated value. However, the QST does not apply in the following cases:
- An individual gives a vehicle to another individual and the two individuals are spouses or related by blood, marriage or adoption (in this case, the term "spouse" includes a de facto or common-law spouse, as defined for the purpose of calculating income tax). Both individuals must complete and sign form VD-80.1-V, Declaration of a Transaction Between Related Individuals with Regard to a Road Vehicle Registered in Québec.
- The succession of a deceased person gives a vehicle to an individual in execution of the deceased's will or in accordance with the applicable legislation concerning inheritance.
- The vehicle is transferred from one individual to another as part of the settlement of their rights arising from their marriage, subsequent to a divorce, legal separation, marriage annulment or death.
Under the QST system, gifts of used road vehicles that are registered are generally taxable if one of the parties is a corporation. The QST is calculated on the estimated value of such vehicles, at the rate of 9.975%.