No. When someone passes away, the Canada Revenue Agency (CRA) combines all of their assets into an estate. Once the value of the estate has been determined, the CRA deducts the appropriate amount of tax before issuing a clearance certificate. With the tax liability settled, inheritances are then paid out in accordance to the last will and testament. This means that any inheritance amount that you receive has already been taxed at the estate level.
Note: While you don’t need to pay taxes on any inheritances you receive, keep in mind that any income you earn by investing these amounts is considered taxable.
Where can I learn more?
- Amounts that are not taxed (CRA website)