When you die, you are “deemed” to have disposed of all of your assets — just as if you had sold them immediately before you died. This may trigger a gain or loss. If there is a net gain, your estate Estate The total sum of money and property you leave behind when you die. + read full definition will owe income tax Income tax A charge you pay based on your total income from all sources. The Canadian government… + read full definition . It may also have to pay probate Probate Fees to settle your estate after your death. The probate process includes reviewing your will… + read full definition fees. Learn more about how to reduce the taxes and fees your estate will pay after your death.
A final tax Tax A fee the government charges on income, property, and sales. The money goes to finance… + read full definition return covers the period from January 1 up to and including the date of death:
Before any property can be distributed to the beneficiaries, the executor Executor Someone you name to carry out the wishes that you set out in your will… + read full definition should obtain a clearance certificate from the Canada Revenue Agency (CRA). This certifies that all final taxes owing have been paid. Learn more about filing a final return.
Before the beneficiaries can receive any property from an estate, the CRA must issue a clearance certificate saying all final taxes owing have been paid.
If you need to file a final return, remember these key deadlines: