Is an inheritance from another country taxable in Canada?

Arsen Accounting Services · Question 178 · Sources checked October 29, 2026

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Most inheritances are not included in the recipient's Canadian income simply because they are received. However, income earned afterward, foreign-asset reporting, and distributions from a foreign trust can raise separate issues. “Inheritance” is not a complete tax classification for every payment.

Identify what you actually received

CRA lists most gifts and inheritances as non-taxable amounts, while income earned on them remains reportable. For inherited specified foreign property, CRA's T1135 guidance uses fair market value when received as the relevant cost starting point.

A foreign estate or trust distribution may require additional information-return analysis, including possible T1142 reporting. The documents and applicable exceptions matter; do not assume a bank transfer description settles that question.

Official guidance: [1], [2], [3].

Separate capital from later earnings

For example, inherited cash left in a foreign account may earn interest after receipt. Keep the inheritance amount, receipt date, later interest, and subsequent transfers distinct. Moving the money to Canada is not necessarily the event that determines income recognition.

Gather the inheritance record

• Will, estate statement, or trustee distribution letter.
• Description and value of property received.
• Receipt date, account statements, and currency information.
• Documents separating estate income from inherited capital.

Ask the preparer to review income reporting and foreign information returns separately. Retain valuation records for a later asset sale. If the foreign jurisdiction imposes estate or inheritance charges, obtain qualified advice there; do not assume those charges automatically generate a Canadian personal foreign-tax credit.