The tax rule treating you as having sold everything at fair market value immediately before death, triggering capital gains on the final return.
The Canadian position
A rollover defers the tax where property passes to a spouse or a qualifying spousal trust. Otherwise the gain is realised and taxed.
For a family holding a rental property or a portfolio, this is often the single largest liability the estate faces.
The Islamic position
Tax is a debt of the estate, payable before bequests and shares. The faraid fractions therefore apply to the net figure.
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 →
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
- Estate administration tax value vs deemed disposition value ontario — Treadstone Law
- Spouse title change capital gains rollover ontario — Treadstone Law
- Estate tax on rental property ontario — Treadstone Law
- Wills & estates practice — Treadstone Law