Is inheritance money taxed?

No. When someone passes away, the legal representative files a final return to the government and all of the deceased person’s assets and income (also known as an estate) are taxed on this final return.  Once this return has been assessed, the legal representative can request the CRA to issue a clearance certificate confirming that any tax liability has been settled. It is only then that the inheritances are paid out in accordance to the last will and testament. This means that any inheritance amount you receive has already been taxed at the estate level.

Note: While you don’t need to pay taxes on any inheritances you receive, any income you earn by investing these amounts is considered taxable.

Where can I learn more?