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Can charitable giving reduce the estate's tax?

Yes. A bequest to a registered Canadian charity generates a donation tax credit that can offset tax on the final return.

This is legal information only. For advice on your own circumstances, speak to a lawyer.

Yes. A bequest to a registered Canadian charity generates a donation tax credit that can offset tax on the final return.

The Canadian position

Use the charity's exact registered name and number. Percentage gifts adjust with the estate's value; fixed sums do not.

Donations of publicly traded securities can be especially efficient.

The Islamic position

This makes the sadaqah jariyah portion of the wasiyyah tax-efficient as well as religiously meaningful.

The one-third cap still applies to the bequest as a whole.

Researched — the four schools agree

All four Sunni schools cap a bequest at one third of the net estate, after debts and funeral expenses.

All four Sunni schools researched and sourced. Reviewed 2026-08-16. Full positions, evidence and sources — The one-third cap on a bequest.

Related madhhab issue: Is a trust recognised in fiqh, and is waqf the closest thing?.

Note

This is legal information only. For advice on your own circumstances, speak to a lawyer.

Citations & sources

Every factual claim on this page traces to a source below. Details change — check the original source before relying on any figure, fee or legal position. Anything under “further reading” is related material, not a source for what is stated here.

Islamic primary sources
  1. Surah al-Baqarah 2:180 — the bequest verse — Quran.com
  2. Sahih al-Bukhari, Book 55: Wills and Testaments (Wasaya) — Sunnah.com
  3. Sahih Muslim, Book of Wills — Sunnah.com
Canadian legislation & government
  1. What to do when someone has died — Canada Revenue Agency
  2. Income Tax Act, RSC 1985, c 1 (5th Supp) — Justice Laws Canada
Further reading — Treadstone Law
  1. Charitable donation through will tax credit — Treadstone Law
  2. Disability tax credit deceased persons final return canada — Treadstone Law
  3. Foreign tax credit deceased persons final return canada — Treadstone Law
  4. Executor charitable gifts in will ontario — Treadstone Law
  5. Wills & estates practice — Treadstone Law