Deemed disposition on death — do I need an adviser, or can I do it alone?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: most capital property is treated as disposed of at fair market value immediately before death, with a spousal rollover deferring the result.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Does Canada charge inheritance tax when a parent dies?
No. Canada does not levy an estate or inheritance tax on what a beneficiary receives. What it has instead is a deemed disposition at death, which works quite differently: most capital property is treated as having been sold at fair market value immediately before death, and the accrued gain is reported on the deceased's final return. The tax is therefore a tax on growth in value, payable by the estate rather than by the beneficiaries, and it arises whether or not anything is actually sold. Families arriving from a system built around inheritance tax often plan for the wrong thing entirely, which is worth catching early.
What is a deemed disposition on the final tax return?
It is a rule that treats capital property as disposed of at fair market value immediately before death, so that gains which have accrued over a lifetime are brought into income on the final return. Nothing is sold and no money changes hands, but the gain is measured and reported as if it had been. Two consequences follow for an executor. Valuations at the date of death become the foundation of the return, so evidence for them has to be gathered while it is still obtainable. And the tax can fall due before any asset has been converted into cash to pay it.
Does leaving everything to my spouse defer the tax?
A rollover to a spouse can defer the result, so that the gain is not brought into income on the first death but carried forward instead. Whether it is available in a particular estate depends on the terms of the will, how the property actually passes, and the circumstances of the surviving spouse, which in a cross-border family is rarely a formality. The deferral is also only a deferral: the accrued gain remains in the property and is measured later. Planning that relies on it should be explicit about what happens on the second death, because that is when the whole of it arrives at once.
Is my property abroad caught by the deemed disposition?
Foreign assets sit inside the computation. The deemed disposition is applied to capital property wherever it is situated, so a holiday home, a share in a family company or an investment account held outside the country is measured on the same basis as property held here. That produces the reconciliation problem at the centre of most cross-border estates: the same asset may also be exposed to a death tax where it is located, on a different measure, at a different date, reported to a different authority. The two filings have to be prepared with each other in view rather than separately.
Can foreign death taxes be credited against Canadian tax?
Relief for foreign death taxes may be available, and in a cross-border estate it is usually the largest single item in the computation. It is also the part that is most often lost, because a credit has to be supported by evidence of what was paid, on what property, and to whom, and that evidence is easiest to assemble while the foreign filing is being made rather than years afterwards. The two systems measure different things, which is why the reconciliation is done deliberately. An executor who treats the two filings as unrelated tends to discover the mismatch after both have been submitted.
Who pays the tax if the estate has no cash?
The liability arises on the final return and falls on the estate, which puts the executor in a difficult position where the value sits in property rather than in an account. This is a common shape for a cross-border estate, because the assets that carry the largest accrued gain are frequently the ones that take longest to release or sell. The practical answer is to compute the exposure early, before decisions about which assets to keep are made, so that the family chooses what to realise rather than having the timetable choose for them.
Does foreign employment income create RRSP room?
Only where it is earned income reported on a Canadian return. RRSP room is built from earned income that Canada sees, so a non-resident year of foreign salary generally builds none, and foreign tax paid does not create room of its own. This is why people returning to Canada after years abroad find their contribution room much smaller than the years elapsed suggest, and why the notice of assessment is the only reliable statement of it. See returning to Canada after years abroad.
Does keeping a bank account or a house make me resident?
A house available to you is one of the strongest indicators, especially with family living in it. A bank account on its own is a secondary tie that matters only in aggregate. Authorities weigh the whole picture: dwelling, spouse and dependants first, then accounts, licences, memberships and registrations. Leaving with a suitcase while the family home stays occupied rarely ends residency. See keeping a home while abroad.
