Beneficiary Tax Liability Calculator — Canada

No. Canada has no inheritance or estate tax. The deceased's estate settles all taxes (via the deemed disposition on the final return) before assets are distributed, so beneficiaries receive their inheritance tax-free. You only pay tax on income the inherited assets generate after you receive them.

The RRSP/RRIF value is taxable, but the tax is generally the estate's liability, reported on the deceased's final return, unless it rolls tax-deferred to a spouse, common-law partner, or dependent. If a non-spouse is named as the direct beneficiary, this can create friction because they receive the plan while the estate bears the tax.

You inherit the property at its fair market value at the date of death (the estate having already been taxed on the gain to that point). If you later sell it for more, you pay capital gains tax only on the increase in value since you inherited it, not on the whole gain.

Receiving a foreign inheritance is generally not taxable in Canada. However, you must report foreign property worth over $100,000 on Form T1135, and any income the inherited foreign assets generate is taxable. Some countries impose their own estate or inheritance tax before the funds leave.