Nearly 3 million Canadians live outside Canada — in the US, the UK, Australia, the UAE, and across Southeast Asia. Whether you're a temporary expat on a work assignment or a permanent resident of your new country, estate planning as a Canadian abroad involves a unique set of rules that differ fundamentally from those facing American or British expats.
Canada has no estate tax, but it has deemed disposition at death — a tax concept that catches many Canadian expats off guard. It also has departure tax when you leave Canada, provincial will requirements that vary across 13 provinces and territories, and retirement account rules that don't work the same way outside Canada.
In Canada, succession law is a provincial and territorial matter. There is no single federal succession law — each province and territory has its own Wills and Succession Act (or equivalent). As a Canadian living abroad, the question of which province's law applies to your will depends on:
A will that is valid under the laws of the province where it was made, or the province where the testator was domiciled at the time of making the will (or at death), is generally recognised across Canada. Most provinces have enacted uniform legislation recognising inter-provincial and international wills. Practically, this means a will drafted under Ontario or British Columbia law is widely recognised across Canada — as long as it meets the formal requirements of that province.
LegalWills.ca helps Canadians living anywhere in the world create a provincially valid Canadian will online — with specific support for all 13 provinces and territories.
Create Your Canadian Will at LegalWills.ca →Canada does not have a formal estate tax or inheritance tax. However, the Income Tax Act treats death as a deemed disposition — the deceased is considered to have sold all capital property (investments, real estate other than the principal residence, shares, etc.) at fair market value immediately before death. Any resulting capital gains are included in the deceased's final income tax return.
If you hold Canadian investments that have appreciated significantly since purchase, your estate will face a significant income tax bill on death — even though no assets have actually been sold. For example, if you hold $500,000 in Canadian stocks with an adjusted cost base of $100,000, the deemed capital gain of $400,000 (of which currently 66.67% is included in income for gains above $250,000 as of 2024 changes) will be taxed in your final return at your marginal rate.
The principal residence exemption applies to your family home — gains on the sale of a principal residence are exempt from capital gains tax. However, this exemption only covers one property, and Canadians abroad may have lost their principal residence exemption for years they were not resident in Canada.
Capital property can be rolled over to a surviving Canadian-resident spouse or common-law partner on death without triggering capital gains tax — the property transfers at the adjusted cost base rather than fair market value. This defers (not eliminates) the capital gains tax until the spouse disposes of the property or dies. If your spouse is not a Canadian resident, the rollover may not be available.
When a Canadian resident ceases to be tax-resident in Canada — for example, by emigrating to the UAE, Australia, or the US — the CRA treats this as a deemed disposition of most property on the date of departure. Capital gains on most assets are triggered in the year of emigration.
Exceptions include Canadian real estate (taxed when actually sold), RRSPs, RRIFs, TFSAs, and certain other assets. The practical implication: if you left Canada with a significant investment portfolio without proper tax planning, you may have triggered a large departure tax bill. This affects how your estate is structured today.
If you name a spouse or qualifying dependant as the RRSP beneficiary, the RRSP rolls over to them on death without triggering income tax. If you name a non-qualifying beneficiary (e.g., adult child, sibling), the full RRSP value is included in your income in the year of death — taxed at your marginal rate.
For Canadians living abroad, RRSP management is complex. Contributions are generally not allowed once you become a non-resident, and there may be withholding tax on withdrawals. Review your RRSP beneficiary designation and consult a cross-border tax specialist.
You can name a successor holder (spouse or common-law partner) for a TFSA — the account continues in their name without tax. For other beneficiaries, the TFSA value at the date of death passes tax-free; any growth after that date may be taxable. Canadians who have become non-residents lose the ability to contribute to their TFSA, and there may be implications for the TFSA while abroad.
While all provinces require a written, signed, and witnessed will (or a holographic will — entirely handwritten and signed), there are some differences:
Your executor (called a "liquidator" in Quebec) must be able to act in Canadian courts and deal with Canadian financial institutions, government agencies, and the CRA. An executor resident in another country may face practical difficulties. Consider:
LegalWills.ca is trusted by Canadians in over 180 countries to create provincially valid wills, powers of attorney, and living wills — entirely online.
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