Canada does not have a formal estate or inheritance tax. However, when someone dies, CRA treats it as a deemed disposition - meaning the deceased is considered to have sold most of their assets at fair market value immediately before death. A legal representative (executor or estate trustee) must file a final T1 personal income tax return for the deceased for the year of death. Unregistered RRSP or RRIF balances are generally included in the deceased's income for the year of death unless transferred to a qualifying surviving spouse. A legal representative can optionally file a separate "rights or things" return for amounts the deceased was entitled to but had not yet received at death. Before distributing estate assets, the executor should obtain a CRA clearance certificate confirming all taxes have been paid.