The estate
Enter values as at the second death. Everything below assumes no surviving spouse — that is the scenario the tax applies to.
Registered accounts
Added to income in full on the final return.
Not taxable at death. Included so the estate total is right.
Non-registered and property
What you paid. The difference is deemed realised at death.
Exempt from capital gains, but usually part of the probated estate.
Cottage, rental, or second property at market value.
Fully taxable gain — the principal residence exemption applies to one property only.
Other
Pension, CPP, OAS and anything else received before death.
Donation credits on the final return are unusually generous — try a number here.
A named beneficiary keeps those assets out of the probated estate. It changes the probate fee, not the income tax — the RRIF is still fully taxable on the final return.
Questions about tax at death
Does Canada have an inheritance tax?
No, and that is the source of most of the confusion. Beneficiaries do not pay tax on what they receive. The estate pays, through the deceased's final return, and the bill can be large: the entire RRSP or RRIF is added to income in one year, and every capital gain is deemed realised on the day of death. There is no separate death tax, but the effect on what reaches your family is much the same.
What is deemed disposition?
Immediately before death you are treated as having sold everything you own at fair market value, whether or not anything is actually sold. Accrued gains that had been deferred for decades all become taxable in that single year. Half of each gain is included in income and taxed at your marginal rate, which by then is usually the top one because the RRIF has already been added on top.
Does the spousal rollover eliminate the tax?
It defers it, which is not the same thing. Assets rolling to a surviving spouse transfer at cost with no tax at the first death. But the liability moves with the assets, and now sits in one person's hands rather than two. At the second death the whole accumulated position lands on a single return, in a single year, at a single set of marginal rates. Two deaths with planning in between usually costs far less than one death with everything postponed to it.
Is a TFSA taxable at death?
The balance at the date of death is not taxable. Income earned inside the account after the date of death is taxable to the beneficiary unless a spouse was named successor holder, in which case the account simply continues in their name and keeps its tax-free status. Naming a successor holder rather than a beneficiary is the better designation where a spouse is involved, and it costs nothing to change.
Do beneficiary designations avoid the tax?
They avoid probate fees on those assets, not income tax. A RRIF paid directly to a named adult child still gets added to the deceased's income in full on the final return. The estate pays that tax, and the child keeps the RRIF. Where the estate and the beneficiary are different people, that mismatch can leave one beneficiary with the money and another with the bill — one of the more common and more damaging planning errors.
Are charitable donations more valuable at death?
Considerably. On the final return the donation limit rises to 100% of net income, against 75% during life, and donation credits at the top tier are worth roughly the top marginal rate. Donating appreciated securities in kind eliminates the capital gain entirely as well as generating the credit. Try a figure in the donation field above to see the effect.
What are probate fees and how do they differ from tax?
Probate fees are a provincial charge on the value of assets passing through your will, paid before the court confirms the executor's authority. They vary enormously: Alberta caps them at $525 regardless of estate size, Manitoba abolished them, Quebec charges nothing on a notarial will, while Ontario takes $15 per $1,000 above $50,000 and British Columbia roughly 1.4% above $50,000. They are almost always far smaller than the income tax on the same estate — which is why fixating on probate while ignoring the RRIF is the wrong order of priorities.
Can the final tax bill be reduced?
Only in advance. The lever is the size of the registered balance that arrives at the second death, and that is set by the drawdown decisions made in the twenty years before it. Deliberate withdrawals through low-rate years, charitable planning, and getting beneficiary designations right all reduce it. None of them can be done by an executor afterwards.
Educational estimate, not tax or legal advice. This tool applies combined federal and provincial marginal rates for 2026 to the figures you enter, assumes no surviving spouse, and treats the capital gains inclusion rate as one half. It does not model the alternative minimum tax, graduated rate estate planning, trusts, corporately held assets, small business or farm property exemptions, US situs assets, foreign reporting, executor and legal fees, or provincial variation beyond the rates listed. Probate figures are current for 2026 for the provinces shown and are applied to assets passing through the will only. Estate tax is genuinely complicated and the numbers here are an order-of-magnitude estimate. Consult an estate lawyer and a tax accountant about your own situation.