By Ka Hing Cheung

In British Columbia, it is common for parents to gift an old car to their child when they upgrade to a new vehicle. Since the older vehicle is already paid for and well maintained, gifting can be a way to help a young adult get started with reliable transportation without spending extra money.

However, the process involves more than simply handing over the keys. To avoid unexpected retail sales tax or insurance complications, it is important to understand how ICBC handles transferring vehicle ownership and what forms and documentation are required.

Below is a clear guide to gifting a vehicle between immediate family members in BC, including how to avoid paying retail sales tax, what paperwork to fill out, and how insurance coverage changes once the vehicle recipient takes possession.

If you need help at any point, you can always contact your local Autoplan broker or King Insurance for guidance.

When is PST Exempt on a Gifted Vehicle?

If the vehicle is being transferred as a genuine gift between immediate family, no PST is charged. In BC, immediate family includes:

• Parent and child
• Grandparent and grandchild
• Siblings
• Spouses and common-law partners
• Step-relations in the above categories

If you fall into one of these relationships and no money changes hands, the transfer is considered tax exempt.

However, all the following conditions must also be met:

• Both the giver and receiver must be BC residents.
• A Gift of Vehicle Transfer Form must be submitted when processing the transfer.

If either person lives in other provinces, PST may be charged. For example, if a parent in Alberta gifts a truck to a child living in BC, PST will apply when the child registers and insures the vehicle here in Canada. This can add up to thousands of dollars, especially for new vehicles. It is always best to confirm residency and tax status before you begin.

Required Documents for Transferring Vehicle Ownership

To transfer ownership of the vehicle at an Autoplan broker, you will need:

1. Transfer/Tax Form (APV9T)
   This is used to record the transfer and indicate that the vehicle is a gift.
2. Gift of Vehicle Declaration Form
   Both parties sign to confirm that no payment is involved.
3. Original Vehicle Registration
   Signed by the current owner.
4. Government-issued ID
   Both you and the receiver must show ID at the time of transfer or complete signing in advance.

If the vehicle has a loan or lien registered against it, that financial interest must be released before the transfer can take place. Most older, fully paid-off vehicles will not have this complication, but it is always worth checking ahead of time. Be sure to file your completed forms correctly.

Fees You Can Expect to Pay During Vehicle Registration

Even when PST is exempt, there are still standard ICBC administrative fees. These include:

• $28 title and ownership transfer fee
• $18 plate fee if new plates are required

If the new owner plans to keep the existing plates, they may not need to pay the plate fee. However, the insurance policy tied to the plates will need to be cancelled, changed, or rewritten, depending on the situation.

If the vehicle is part of a business fleet or used for property management, additional forms may be required to confirm ownership. Your broker can explain which services apply to your case.

Updating Insurance After the Transfer

The moment ownership changes, the existing insurance policy must be reviewed. ICBC insurance is based on who drives the vehicle, how often it is driven, and where it will be stored.

The adult son or daughter receiving the vehicle will need to:

• Purchase a new insurance policy in their own name, even if using the same plates.
• Declare the principal driver, which is the person who will use the vehicle most often.
• List household members and regular drivers if applicable.

Many young adults on their first policy may benefit from the BC Driving Experience Discount if they have driving experience from outside BC or another country. The broker can help determine whether proof of driving history is needed and how to submit it.

Claims History and Previous Accidents on the Old Vehicle

If the parent had previous claims on the vehicle, those claims do not automatically transfer to the child. However, the premium may still be affected if the child has limited driving history or a short insurance record. The good news is that the child can begin building their own safe driving discount immediately once the vehicle is insured in their name.

When Do Taxes Apply?

There are situations where PST will still be charged on a vehicle transfer that is called a gift:

• The giver is not an immediate family member.
• One party is not a BC resident.
• The vehicle was “gifted” but money was quietly exchanged.
• There is still a loan on the vehicle and the financing transfer triggers tax assessment.
• The vehicle was recently purchased by the giver and has not yet been registered in their name.

In any of these cases, PST is usually calculated based on the Canadian Black Book wholesale value of the vehicle, not the amount paid.

A Simple Step-by-Step Example

For a straightforward parent-to-child BC transfer:

1. Parent and child meet at an Autoplan office with ID.
2. Parent signs the registration and both sign the Gift of Vehicle Declaration.
3. Broker completes the APV9T transfer form indicating tax exemption.
4. Child purchases new insurance and either keeps or replaces the plates.
5. Vehicle ownership is officially transferred.

The entire process typically takes less than 30 minutes as long as the correct documents are on hand.

Final Thoughts

Gifting a vehicle in BC is meant to be simple for immediate family, and most transfers are taxed at zero. The key is to confirm residency, bring the correct documents, and update insurance at the same time as the ownership transfer. If you’re exchanging vehicles of the same type, make sure both insurance policies are adjusted correctly. A quick conversation with an Autoplan broker before you arrive can also prevent surprises.

If you have questions or would like help preparing documents for a gifted vehicle transfer, the team at King Insurance is ready to assist.

About King Insurance

Located at the northwest corner of Marine Drive and Main Street, King Insurance proudly serves not only the South Vancouver communities of Marpole, Sunset, Oakridge, Victoria–Fraserview, and nearby areas like Marine Gateway and Marine Landing, but also clients across Richmond and the entire Lower Mainland. 

Ka Hing Cheung is proud to work in the insurance industry, helping people manage risk and protect what matters most. Ka Hing is committed to ongoing learning and enjoys helping clients find the right coverage at the best available rate, while making sure they understand their options clearly.