Estate & Trust Tax in Vancouver

It depends on the date of death. For a death between January 1 and October 31, the final T1 — the terminal return — is due April 30 of the following year; for a death between November 1 and December 31, it is due six months after the date of death, on the same calendar day. Where the deceased or their spouse or common-law partner carried on a business, the filing date moves to June 15 of the following year for a death between January 1 and December 15, or to six months after death for a death between December 16 and December 31. The extended filing date does not move the payment date — any balance owing is still due on the ordinary date, which is April 30 of the following year or six months after a November or December death, so the tax is often payable before the return is filed.

Three things, all on the final return: the income earned up to the date of death, the fair market value of an unmatured RRSP or RRIF at that date, and the accrued gains on everything else the person owned — a person who dies is treated as having disposed of their capital property just before death at fair market value. Property that passes to a surviving spouse or common-law partner who was resident in Canada at the time of death, or to a qualifying spousal or common-law partner trust, is instead treated as sold at its adjusted cost base, provided it vests indefeasibly within 36 months of death and the legal representative does not elect out. The registered plan amount can be reduced the same way where it is paid to a qualifying survivor — a spouse, a common-law partner, or a financially dependent child or grandchild. Establishing fair market value as at the date of death is usually where the real work sits.

You can, and if you do you take on the liability personally. A clearance certificate confirms the estate has paid all the income tax and GST/HST, interest and penalties it owed; a legal representative who distributes without one is personally liable for unpaid amounts, up to the value of the assets distributed. It is requested on Form TX19, and on Form GST352 as well where the estate has a GST/HST account. The returns have to be filed and assessed, and the balances paid or secured to the CRA's satisfaction, before the certificate is issued.

Most resident family trusts do. Under the enhanced reporting rules a resident express trust files a T3 return each year, income or no income, unless it is a listed trust — for example one whose assets have a total fair market value of no more than $50,000 throughout the year, a test that for taxation years ending on or after December 31, 2024 applies whatever kind of assets the trust holds, or one that has existed for less than three months. A trust that files generally also completes Schedule 15, naming each trustee, settlor and beneficiary, and anyone able to exert influence over trustee decisions on the appointment of the trust's income or capital, with each one's address, date of birth for individuals, jurisdiction of residence and tax identification number. The return and any balance owing are due no later than 90 days after the trust's tax year-end, so a December 31, 2026 year-end means filing by March 31, 2027.

Some do, for taxation years ending on or after December 31, 2026 — certain bare trusts are inside the trust reporting rules for the first time, so a December 31, 2026 year-end means a T3 return including Schedule 15 due March 31, 2027. Bare trusts were not required to file for taxation years ending in 2024 or 2025, and that relief does not carry forward. A reportable bare trust is broadly an arrangement where one or more legal owners hold property for the use or benefit of someone else and can reasonably be considered to act as that person's agent — a nominee holding title to real estate, for instance. Several ordinary family arrangements are excluded, among them one where the legal owners are related individuals and the property would be the principal residence of one of them, which covers a parent on title so a child can qualify for a mortgage.

A trust is deemed to have disposed of its capital property at fair market value every 21 years, whether or not anything is actually sold, and the trust reports the result on Form T1055 for that year. For most trusts the first of those days falls 21 years after the trust was created, and the deemed disposition repeats every 21 years after that. Spousal and common-law partner trusts, joint spousal or common-law partner trusts and alter ego trusts work differently: the first deemed disposition day is the death of the beneficiary spouse or partner, the death of the settlor, or the later of the two, with the 21-year cycle running from that day if the trust continues. A trust approaching the date has to choose in advance between rolling the property out to its Canadian-resident capital beneficiaries at the trust's cost amount under subsection 107(2) and keeping it and funding the tax.