Updated Checked by the Tax-Services.ca editorial team How we check
Taxes after death start with one final T1 return, filed by the legal representative. It is due April 30 of the next year for a death from January 1 to October 31, or six months after the date of death for November or December. Most surprises come from what the CRA counts as income on that return.
| Date of death | Final T1 due |
|---|---|
| January 1 to October 31 | April 30 of the following year |
| November 1 to December 31 | Six months after the date of death |
When is the tax on the final return due?
The CRA’s page on filing and payment due dates after a death treats the two as the same day for most people, so any balance owing is due when the return is. Interest on an unpaid amount runs from the day after the due date.
There’s one wrinkle. If the person, or their spouse or common-law partner, was running a business, the filing date can be June 15 of the following year for a death between January 1 and December 15. The payment date doesn’t move. Not sure which applies? Read that page before you count on a deadline.
What goes on the final return?
You report everything the person earned from January 1 to the date of death, the same way as any other year. Then come the extras that only happen at death. The CRA treats the person as having sold all capital property just before dying, at fair market value. It also treats RRSP and RRIF balances as income received just before death, unless they pass to a spouse or partner on the special terms.
A T3 trust return may also be needed for income the estate earns after the death. That’s a separate filing with its own rules.
How much tax does the deemed sale create?
You start with what the person owned. Cottage, shares, rental property: each one produces a gain or loss as if sold on the day. A principal residence can be exempt, but the CRA says you still designate it on the final return with Schedule 3 and form T1255, even if the whole gain is exempt. Forget that and you’ve got a mess to clean up later.
Property that goes to a surviving spouse or common-law partner can roll over at its cost, with no gain reported, if the conditions are met. The gain waits until the spouse sells. One of the CRA’s conditions is that the property becomes locked in within 36 months of the death.
In the year of death, net capital losses also get extra room. They can reduce other income as well as other gains. To estimate the tax on a deemed gain, use the capital gains tax calculator. We use a 50% inclusion rate for 2026, because Finance Canada’s release of September 15, 2026 lists the cancellation of the proposed increase.
What happens to an RRSP or RRIF at death?
This one catches families out. The full market value of the plan is income on the final return, all in one year. A $100,000 RRSP on top of $40,000 of pay in Ontario adds about $32,015 of tax on our 2026 data, which is 32% of the plan. Compare that with a spouse rollover, where the tax is deferred. The RRSP withdrawal tax calculator runs the same sum for any amount, and the retirement income tax calculator shows a normal year for comparison.
The same $32,015 comes out of a $200,000 capital gain at 50% inclusion, because both add $100,000 of taxable income. A big registered balance and a big gain hit the return in a similar way.
Picture Leila, whose father died in September with a $100,000 RRIF and a modest pension. She expected a small final return. Instead the whole RRIF landed on it, and she was glad she’d checked before the estate paid out a cent to the beneficiaries.
Is there a tax on the estate itself?
The CRA pages we read describe a final return, not an inheritance tax. On top of that, some provinces charge a probate fee on the estate’s value. Ontario’s Estate Administration Tax is $15 for each $1,000 above $50,000 of estate value, and the province’s page on the tax says nothing is owing on an estate worth $50,000 or less. On a $500,000 estate, that’s $6,750. The estate administration tax calculator handles the other provinces we have data for.
Assets with a named beneficiary, or held jointly, usually sit outside the estate value for that fee. Income tax on a registered plan is a different charge and doesn’t disappear because the plan skips probate.
What mistakes cost the most?
Distributing the estate before the tax is sorted is the big one. Read the CRA’s page on what happens after you file, which covers the clearance certificate, before you hand over the money.
Others are smaller. Missing the T1255 designation on the house. Leaving out a rollover election. Forgetting that the final return and the estate’s T3 are two different filings. The 50% inclusion rate hasn’t moved: the planned rise to two thirds was cancelled in March 2025, and Finance Canada’s release of September 15, 2026 lists the cancellation again.
If the estate holds a business, foreign property or a cottage with a large gain, you’ll want an accountant for the return. A plain estate with a house and a bank account is a smaller job.
For more, see the final tax return after a death, estate tax in Canada and capital gains on inherited property.
Where we got these figures
Filing and payment dates, the deemed sale, the RRSP and RRIF rule, the rollover and the T1255 requirement come from the CRA‘s pages for preparing returns for someone who died. The Ontario fee comes from Ontario.ca. Dollar examples are from our calculators on 2026 data and are estimates. This is an independent information site, not connected to the CRA or any government.
Rechecked in November 2026 on canada.ca: the filing and payment dates for a death from January 1 to October 31 and from November 1 to December 31, and the later June 15 filing date when a business was running, on the CRA’s page on filing deadlines for someone who died.
Frequently asked questions
When is the final tax return due after a death?
April 30 of the next year if the person died between January 1 and October 31. For a death in November or December, six months after the date of death. If a business was running, the filing date can be June 15, but payment is still due on the earlier date.
Is there an inheritance tax in Canada?
The CRA pages we read describe the final return, not an inheritance tax. The estate can owe tax on income and on a deemed sale of property, and some provinces charge a probate fee on the estate’s value. Ask a professional about your estate.
Does an RRSP get taxed when someone dies?
Yes, unless it passes to a spouse or partner on the special terms. The plan’s market value is income on the final return, so a large RRSP can push the final return into a high bracket. A rollover to a spouse defers the tax.
Do I pay tax on a house the person owned?
A principal residence can be exempt, but the CRA says to designate it on the final return with Schedule 3 and form T1255. Without the designation, the gain on a deemed sale may be taxed, so do not skip the form even when you expect no tax.
How much is Ontario's probate tax on $500,000?
$6,750, at $15 for each $1,000 above $50,000, per Ontario.ca. The first $50,000 carries no tax in that calculation. Other provinces use different fees and rules, so check the one where the person lived when they died. Probate fees are separate from the income tax on the final return.
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