No inheritance tax as such. What exists is a deemed disposition — the deceased is treated as having sold everything at fair market value immediately before death — plus provincial probate fees.
The Canadian position
Capital gains triggered by the deemed disposition are taxed on the final return. A rollover defers the tax where property passes to a spouse or a qualifying spousal trust.
Probate fees vary enormously by province, from nothing in Manitoba to roughly 1.5% in Ontario and higher in Nova Scotia.
The Islamic position
Tax is a debt of the estate, payable before bequests and shares. The faraid fractions therefore apply to the net figure after tax, not the gross.
All four schools work through the estate in the same order: the cost of preparing and burying the body, then debts, then bequests up to one third, and only what is left is divided by the fixed shares. The disputes are not about the sequence but about two rankings inside it.
All four Sunni schools researched and sourced. Reviewed 2026-08-19. Full positions, evidence and sources — The order of payment out of an estate.
Making an Islamic will in Canada — province by province, and what makes one valid where you live →
The largest tax bill in a Canadian estate often relates to an asset that passed outside the estate — an RRSP going to one named person while the estate pays the tax.
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.
- What to do when someone has died — Canada Revenue Agency
- Income Tax Act, RSC 1985, c 1 (5th Supp) — Justice Laws Canada
- Principal residence exemption — Canada Revenue Agency
- Cottage capital gains tax death ontario — Treadstone Law
- Deceased final tax return estate taxes ontario — Treadstone Law
- Estate administration tax value vs deemed disposition value ontario — Treadstone Law
- Spouse title change capital gains rollover ontario — Treadstone Law
- Wills & estates practice — Treadstone Law