Is There an Inheritance Tax in BC? (What Actually Gets Taxed at Death)

Short answer: no. Neither BC nor Canada has an inheritance tax or estate tax. Beneficiaries do not pay tax on what they inherit. But three real costs hit the estate before anything is distributed:

1. The deemed disposition (the big one): at death, the deceased is treated as having sold everything at fair market value. Unrealized capital gains — on the cottage, the rental property, the stock portfolio — become taxable on the final return. Key exceptions: assets rolling to a spouse defer the gain, and the principal residence exemption usually shelters the family home.

2. Registered accounts: RRSPs/RRIFs are fully taxable as income on the final return unless rolled to a spouse or qualifying dependant — often the single largest tax item. (Details →)

3. Probate fees: BC's ~1.4% fee on estates over $50,000 (calculator →) — a fee, not a tax, but real money.

What to actually do (executor):

1. Don't distribute until the final return is filed and the CRA clearance certificate is in hand — distribute early and the tax bill can become yours.
2. Get an estate-experienced accountant for the final return — deemed-disposition math is where DIY goes wrong. (Accountant vs lawyer →)
3. Beneficiaries: what you receive isn't taxed, but income it earns after you receive it is ordinary taxable income.

Find help: vetted BC estate accountants →

Foxglove is a guide, not a law firm. General information, not legal advice; forms and rules change — confirm current requirements with the Supreme Court of BC, the official BC government forms page, or a qualified BC professional. Find vetted BC help →