Inheritance tax?

June 2020: A regular question I am asked is whether there is an inheritance tax, to which the answer is no. However, there are 3 other levels of tax on death, some of which many are unaware of or haven’t planned for. The first is the tax payable on your final tax return which includes not just your regular income, interest, capital gains and losses. CRA considers it as if you sold everything the day you died, which then triggers all capital gains/losses to your date of death as well as your RRSP/RRIF values. The second tax is probate fees, which your executor has to pay upfront to the court so they will grant letters of probate and your assets can be distributed. The third tax is trust tax on income, interest and capital gains/losses accumulated after your date of death until your estate is distributed to your beneficiaries. If assets are distributed before all these taxes are paid, your executor may need to go back to your beneficiaries for unpaid tax, or may even be personally liable themselves. Working with your Certified Financial Planner and team of tax and legal professionals can help you minimize your taxes, expedite distributions, allow you control of your assets, and help ensure sufficient cash is available when needed.