Is There Estate Tax in Canada?

While there is no estate tax in Canada, there is a deemed disposition tax which is similar to estate tax. When someone passes away, he/she is considered to have sold all of his/her assets at fair market value (ie, a “deemed disposition” of his/her assets) and is taxed accordingly on any gains.

There are certain exemptions from this tax. For example, if the assets are transferred to a surviving spouse there is generally no tax. However, when the spouse passes away and passes on the assets there may be income tax at that point.

If your assets are substantial they could potentially trigger major taxes when you pass away. It is important to consult a tax and estate professional, like Hudson Law, and implement a tax and estate plan that takes these potential taxes into consideration.