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Inheritance Tax in Canada

Sample imageInheritance tax refers to wealth transfer taxation applied to the bequests and gifts that taxpayers receive. This type of tax differs from gift and estate taxes, with the tax rate depending on the amount of bequests received by the taxpayer rather than what the donor has bequeathed. The average tax rate in states that have adopted inheritance tax legislation is at around 30.5 percent. The top marginal rate paid by children and spouses goes as high as 70 percent in Japan while the rate is just 15 percent in Hong Kong. Countries that have no inheritance or death taxes include Argentina, China, Mexico, India and Indonesia. Among the few industrially advanced countries that don’t require inheritance tax are Australia, Canada, and New Zealand. Canada has no inheritance taxes since 1987 when they were repealed by the government of Pierre Trudeau. However, the income of estate properties that have been inherited is subject to income tax

When a person passes away, no tax is payable for cash held in the bank. However, many people own capital assets (e.g. real estate and stocks) which are deemed sold at fair market value before their owner had passed away. The final return should contain all resulting capital losses or gains. 
 

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