Inheritance Taxes in Alberta
You are the beneficiary of an estate in Alberta. You are worried about inheritance taxes in Alberta. At the time you receive your inheritance, how much is the government going to take as an inheritance tax prior to you receiving your bequest? The inheritance tax lawyers at Kahane Law Office in Calgary, Alberta help take the confusion out of inheritance tax.
What Are Inheritance Taxes?
Many jurisdictions around the world charge an inheritance tax on the wealth an individual transfers to beneficiaries when she or he dies. This is commonly referred to as an inheritance tax, estate tax, or a succession duty. A common example is in the US where gift taxes are combined with inheritance taxes (so as to prevent an individual giving away all her or his assets prior to death and thus avoiding the inheritance tax) at a rate of 40%. There are, of course, exemptions and credits which will effectively reduce this rate, but a tax is imposed nonetheless.
No Inheritance Taxes in Alberta
Part of the Alberta advantage is that there is no inheritance tax. Unlike most other provinces which have their own form of inheritance tax, usually referred to as a “probate fee”, Alberta has none. Instead the Surrogate Court in Alberta charges a modest fee for processing applications for probate or letters of administration. In Alberta the recently increased probate fee caps out at $525.00 for estates over $250,000.
Comparison of Alberta vs. BC Probate Fees
Unlike Alberta, our BC neighbors have an estate tax which they refer to as a probate fee. This tax is charged at a rate of $6 for each $1,000 or part of $1,000 for estate assets valued between $25,000 and $50,000, with the first $25,000 being exempt from the tax. Estate values over $50,000 in BC are taxed at a rate of $14 for each $1,000 or part of $1,000 (effectively a 1.4% tax rate). These inheritance tax examples are based on 2015 numbers and are subject to change.
The different regimes which Alberta vs. BC employ when an application for probate or letters of administration is sought can be illustrated by considering an estate value of $1,000,000. In Alberta the probate fee totals $525. In BC the probate fee (i.e., tax) totals $13,450. The Alberta advantage becomes more apparent as the estate value increases with the probate fee remaining capped at $525. For a $2,000,000 estate the Alberta probate fee remains capped at $525. In BC the number balloons to $27,450. The number in BC will continue to increase while the Alberta fee will remain unchanged.
If you are the beneficiary of an estate in Alberta it’s helpful to know that there is no inheritance tax. However, the advice of a qualified estate lawyer or tax professional should be sought to ensure there are not other tax implications associated with the estate.
Estate Tax Lawyers In Calgary, Alberta
The laws surrounding wills and estate taxes are critical to administering an estate. The estate tax lawyers at Kahane Law Office in Calgary, Alberta are pleased to assist you in all your related estate needs. CONNECT TODAY. You can reach us toll-free at 1-877-225-8817, or 403-225-8810 locally or email us directly here.