Someone has died. 5 things the person handling the taxes should know

Who this is for

Executors, administrators and family members who have taken on someone’s tax affairs. It covers the tax steps. It does not cover probate, the will or the legal duties of an executor; those belong with a lawyer or notary.

The five things

1. Tell the CRA, and know the deadlines. Notify the CRA of the date of death and that you are the legal representative. The final return is due April 30 of the following year. If the person died between November 1 and December 31, it is due six months after death. If the person or their spouse ran a business, the ordinary June 15 date applies with the same six-month rule for December deaths. Any balance owing is still due by the April date.

2. Check whether earlier years were filed. Unfiled returns for earlier years must be filed too, and refunds can be waiting. The deceased’s Notices of Assessment and CRA account show what is on file.

3. Property is deemed sold. Investments, rental property and the home are treated as sold at fair market value immediately before death. Gains go on the final return. Property left to a spouse or common-law partner rolls over at cost, deferring the tax. The home can be designated as the principal residence for the years it qualifies, so the gain on it is often nil.

4. RRSPs, RRIFs and TFSAs each have a rule. The value of an RRSP or RRIF is income on the final return. The exception is when it passes to a spouse or partner, or a financially dependent child or grandchild, under the rollover rules. A TFSA passes tax-free to a successor-holder spouse; other beneficiaries receive the value at death tax-free, with later growth taxable.

5. Ask for a clearance certificate before distributing. After the returns are assessed, Form TX19 asks the CRA to confirm that all amounts are paid. Distributing without it leaves the representative liable for unpaid tax up to what was distributed. Estates with ongoing income may also need a T3 trust return.

What is not taxed

Life insurance paid to a named beneficiary is a tax-free death benefit. The Canada Pension Plan death benefit is taxable, to the estate or the recipient. Gifts and inheritances received are not income to the people who receive them; the tax is settled on the deceased’s side.

How the pieces connect

Every account’s beneficiary form decides which rule applies. The will decides who gets what, but the tax follows the account rules and the deemed sale. Where a family wants to keep a rental property or a business, the tax on the final return can be large. Life insurance is one way families fund it. Planning that in advance is a conversation between the tax side and the insurance side.

What to prepare

When professional help may make sense

Almost always, because the final return is unusual: deemed sales, rollovers, optional separate returns for some income, and the clearance certificate. Delays can cost interest and, for the representative, personal exposure.

How Rex Tax may be able to help

We prepare the final return and any earlier unfiled years, the T3 if the estate has income, and the clearance certificate request. We explain the tax outcome in plain language, in English or Punjabi. We do not give legal advice.

Official sources

• Canada Revenue Agency: Doing taxes for someone who died
• Canada Revenue Agency: Filing deadlines for a deceased person's returns
• Canada Revenue Agency: Capital gains, prepare tax returns for someone who died
• Canada Revenue Agency: RRSP, prepare tax returns for someone who died
• Canada Revenue Agency: Clearance certificate

This guide is general information, not advice about your situation. It reflects the rules for the 2026 tax year. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.