Tax at death
Estimate the additional tax caused by the deemed disposition at death and RRSP/RRIF income inclusion.
Prepared by Groupe Conseil Sabin Painchaud
Prepared on September 21, 2026
Estate tax — deemed disposition at death
Your parameters
Combined marginal rate by taxable income
“Canada does not have a true estate or inheritance tax. At death, the Canada Revenue Agency and Revenu Québec treat most capital property as having been sold at fair market value (a “deemed disposition”), triggering a capital gain (50% of which is taxable), and the RRSP/RRIF balance is fully included in income for the year of death — unless transferred to a surviving spouse (or a financially dependent child/grandchild, under conditions), which defers the tax. This result is an estimate for informational purposes only, based on 2026 combined (federal + provincial) tax brackets applied to total income for the year of death. It does not account for the principal residence exemption (exclude it from the capital gain entered), charitable donations, carried-forward capital losses, probate fees (which vary by province — minimal in Quebec for a notarized will), or legal/estate administration costs. This result does not constitute personalized tax, legal or estate planning advice — consult your notary and tax specialists.”
Calculation assumptions
- The additional tax is the difference between combined (federal + provincial) tax calculated on the “other income” entered alone, and combined tax calculated on total income for the year of death (other income + 50% inclusion of the deemed capital gain + RRSP/RRIF balance, unless transferred to a spouse), using 2026 progressive brackets.
- The capital gain entered should exclude any gain eligible for the principal residence exemption; it is assumed net of any applicable exemption.
- The RRSP/RRIF balance is included at 100% in income for the year of death, unless a transfer to a surviving spouse (tax-deferred rollover) is selected, in which case it is excluded from the calculation (the rollover assumes an eligible spousal or successor beneficiary).
- Quebec residents receive a 16.5% federal abatement, applied to federal tax before adding Quebec provincial tax.
- Probate fees are not included: in Quebec they are minimal for a notarized will (the most common type), but can be significant in other provinces (e.g. Ontario’s estate administration tax) — not modelled here regardless of the province chosen.
- The life insurance amount entered is assumed to be received tax-free by the beneficiaries or the estate, as is generally the case; it is compared to the additional tax to illustrate a net liquidity need or surplus, not to cover all estate settlement costs.
- No non-refundable tax credit, charitable donation, carried-forward capital loss, or legal/administration cost is taken into account.
- This result does not constitute personalized tax, legal, or estate planning advice.
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