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.
The four Sunni schools are not recorded as differing materially on this point in the sources reviewed. Where your own case turns on it, put it to a scholar of your school.
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.
General information, not legal or religious advice. Inheritance depends entirely on the exact family circumstances. Confirm the Canadian position with a lawyer in your province and any religious ruling with a qualified scholar.
Citations & sources
Every factual claim on this page traces to one of the references below. Legislation and dollar thresholds change — verify against the primary source before relying on any figure.
- Research Papers — Cambridge Muslim College
- Research — Cambridge Muslim College
- Academics — Islamic law and theology curriculum — Zaytuna College
- Encyclopaedia of Islam — Brill
- 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
- Adding co owner triggers partial deemed disposition ontario — Treadstone Law
- Non resident executor estate tax residency ontario — Treadstone Law
- Estate administration tax value vs deemed disposition value ontario — Treadstone Law
- Us beneficiary estate tax reporting canadian estate ontario — Treadstone Law
- Deemed disposition death canada — Treadstone Law
- Does ontario have an estate tax — Treadstone Law
- Wills & estates practice — Treadstone Law