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Wealth taxes 2

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Estate taxes, which were not subject to the territorial limitations that affected provincial taxation, were first introduced at the federal level under the Dominion Succession Duty Act in 1941, which was later replaced by the Estate Tax Act in 1958. The latter was repealed at the end of 1971. From 1947 to 1971, there was a complicated set of federal-provincial revenue-sharing arrangements, where:

In Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, and Manitoba, the federal government collected estate taxes at full rates, but remitted 75% of the revenues derived from each of those provinces;

In Alberta and Saskatchewan, the federal government collected estate taxes at full rates, but remitted 75% of the revenues derived from each of those provinces, which was rebated back to the estate;

In British Columbia, the federal government collected estate taxes at only 25% of the full rate, and the province continued to levy its own succession duty;

In Ontario and Quebec, the federal government collected estate taxes at only 50% of the full rate, and remitted 50% of such collections to such provinces, and the provinces continued to levy their own succession duties.

Upon the repeal of the federal estate tax in 1972, the income tax régime was altered to incorporate consequences arising from the death of a taxpayer, which may result in tax being owed:

the property of an estate is said to have incurred a "deemed disposition" at fair market value, thus triggering liability for capital gains and other inclusions into income

certain deductions and deferrals are available with respect to capital gains

several options are available for applying any outstanding net capital losses

income earned or accrued up to the date of death is taxed on the final tax return of the deceased at normal tax rates, but there are several additional optional tax returns that may be filed as well for certain types of income

income earned after the date of death is to be declared on a separate return filed by the trust for the estate

beneficiaries are taxed on amounts paid from Registered Retirement Savings Plans and Registered Retirement Income Funds, but certain rollover reliefs are available


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