Inheritance Tax Canada: Understanding Canada's Tax System

While there is no inheritance tax to be paid by the beneficiaries of an estate in Canada, that does not mean inheritances are immune from taxation. This is because any amounts due on death are taxed in the deceased's estate. The two main levies charged against an estate are income taxes and probate fees. Income taxes and probate fees are applied before the estate is distributed to the beneficiaries named in your Will (or to your heirs if you die without a Will).

Most Canadians will have significant Estate Tax liability in the year of death. All assets are deemed disposed off (sold) at market value and taxed on top of any other income received (pensions, CPP / OAS, employment income, rental income). Income tax is generally the biggest liability most families will have in the year of death.

Probate is insignificant compared to income tax for most families. Here is link to find out about Probate Fee by each Province / Territory

EXAMPLE
Probate Fees on $1 million For Each Province / Territory (For Illustration Purposes Only)
British Columbia $13,650
Alberta $525
Saskatchewan $7,000
Manitoba $0
Ontario $14,250
Quebec N/A
New Brunswick $5,000
Nova Scotia $16,258
Prince Edward Island $4,000
Newfoundland & Labrador $6,054
Yukon $140
Northwest Territories $435
Nunavut $400