Is there inheritance tax in British Columbia?
No. Canada has no inheritance tax and no estate tax, and BC does not add one. If you inherit money or property you do not pay tax on receiving it. But something else happens instead, and it can be expensive if nobody plans for it.
Already acting as executor? Go to the executor's guide — what to file and when →
The short version
What actually gets taxed when someone dies in BC.
- You, as beneficiary: no tax on what you inherit
- The deceased: treated as having sold everything the day before death
- The estate: pays the resulting tax before anything is distributed
- BC probate fees: separate again, and based on the estate's value
So the tax is real — it is just charged to the estate rather than to the people inheriting. That distinction is where most of the surprises come from.
The deemed disposition — Canada's version of a death tax
Instead of taxing the inheritance, CRA treats the person who died as having sold everything they owned at fair market value immediately before death. Nothing is actually sold. But the gain is calculated as though it were, and tax is due on it.
That gain goes on the deceased's final personal return — the terminal T1 — and the estate pays it. People call this the death tax. It is not a separate tax; it is ordinary capital gains tax, triggered all at once.
What is usually taxed
- RRSPs and RRIFs — the entire remaining value is included as income in the year of death, unless it rolls over to a spouse or a financially dependent child. This is often the single largest item.
- Second properties — cottages, rentals and land, taxed on the gain since purchase
- Non-registered investments — shares, funds and other capital property
- Private company shares — frequently the most complicated item in the estate
What usually is not
- The family home — generally sheltered by the principal residence exemption
- TFSAs — no tax on the value at death
- Anything passing to a surviving spouse — normally rolls over at cost, deferring the tax until the second death
- Life insurance proceeds — paid to a named beneficiary tax-free
The spousal rollover is a deferral, not a cancellation. The tax arrives on the second death instead, usually larger. Knowing that in advance is what makes planning worth doing.
BC probate fees are not income tax
Probate is the court process that confirms the will and the executor's authority. BC charges a fee based on the gross value of the estate that passes through it. It is entirely separate from the tax above, and both can apply to the same estate.
| Estate value passing through probate | BC probate fee |
|---|---|
| Under $25,000 | No probate fee |
| $25,000 – $50,000 | Roughly $6 per $1,000 of value |
| Over $50,000 | Roughly $14 per $1,000 of value |
A filing fee also applies to estates above $25,000. Rates change — check the current schedule at BC wills & estates before relying on a figure.
You have received money. Do you owe anything?
Generally not. The estate settles the tax before distributing, so what reaches you is yours.
Two things do follow you afterwards:
- Income the asset earns from then on — rent, dividends and interest are taxable to you
- Future growth — you inherit the property at its value on the date of death, and gains after that are yours when you sell
Keep the date-of-death valuation. It is your cost base, and reconstructing it years later is difficult and expensive.
If you are the executor
You are personally responsible for the estate's tax. Distribute before CRA issues a clearance certificate and you can be held liable for what is still owed — after the money has gone to the beneficiaries.
Returns that may be required:
- The terminal T1 for the year of death
- A T3 trust return for the estate, each year it exists
- Any returns the deceased never filed
The full executor's guide — deadlines, documents and what to file →
Estate and inheritance tax in BC
Is there an inheritance tax in BC?
No. Neither Canada nor British Columbia levies an inheritance tax or an estate tax. A beneficiary does not pay tax on receiving an inheritance. The estate pays tax on the deemed disposition first, and BC probate fees may apply separately.
What is the death tax in BC then?
There is no tax by that name. People use it for the capital gains triggered by the deemed disposition on the final return, and sometimes for BC probate fees. Both are real costs; neither is an inheritance tax.
Do I pay tax on money left to me in a will?
No. Tax is settled by the estate before distribution. You will pay tax on any income the inherited asset earns afterwards, and on any gain in value from the date of death if you later sell it.
Is the family home taxed when someone dies?
Usually not. The principal residence exemption generally shelters the gain on a home that qualified throughout ownership. Second properties such as cottages and rentals are not covered and are frequently the largest taxable item.
What happens to an RRSP or RRIF on death?
The full remaining value is normally included as income in the year of death, which can be the single biggest item in an estate. A rollover may defer it where the beneficiary is a spouse or a financially dependent child.
Does everything pass tax-free to a spouse?
Property passing to a surviving spouse normally rolls over at cost, so no tax arises then. It is deferred, not removed — the gain is taxed on the second death, usually on a larger amount.
Do executors need an accountant?
Not always, but the executor is personally liable for the estate's tax. Where there is a business, a second property, private company shares, or unfiled returns, the cost of professional help is usually far smaller than the cost of getting it wrong.
How much are probate fees in BC?
Nothing below $25,000, then roughly $6 per $1,000 between $25,000 and $50,000, and roughly $14 per $1,000 above that, plus a filing fee. Assets with a named beneficiary, and property in joint tenancy, usually pass outside probate. Check the current schedule before relying on a number.
Or call 604-533-4214. We prepare terminal and T3 returns and deal with CRA on the estate's behalf, from the Langley and Maple Ridge offices and remotely across BC.
General information, not advice for a particular estate. Rules, rates and probate fees change, and the right answer depends on the assets involved.