US–Canada cross-border inheritance & estate tax

When an estate or lifetime gift touches both the United States and Canada, two tax systems can reach the same assets. Here is how each one works in 2026, how double taxation is relieved, and the traps that most often catch cross-border families.

Reflects 2026 rules · an estimate, not advice.

Who is taxed on worldwide assets?

Both countries tax some people on their worldwide estate and others only on assets located there. Get that classification wrong and every number is wrong.

The US side — 2026 figures

• Citizens & domiciliaries are taxed on their worldwide estate and gifts; non-resident aliens only on US-situs assets (US real estate, US company shares, tangible US property). US bank deposits and life insurance are exempt (IRC §2105).
• $15,000,000 unified estate & gift exemption per person; 40% top rate on the excess.
• Portability (DSUE) lets a surviving spouse carry a predeceased spouse's unused exemption — up to a combined $30M — for estate and gift tax (not GST).
• $19,000 annual gift exclusion per recipient; NRAs get only a $60,000 exemption-equivalent (~$13k credit) absent treaty relief.
• 16 US states plus DC levy their own death taxes on top of the federal tax.

The Canada side — 2026 figures

• Canada has no estate or inheritance tax. Instead a deemed disposition at death realises the deceased's unrealised capital gains on their final return.
• About 50% of the gain is taxable at the combined top marginal rate (~44–55% by province) — roughly up to ~27% of the gain.
• A spousal rollover defers the gain to a surviving spouse; heirs inherit at a bumped-up cost base. Provincial probate/estate-administration fees apply separately.
• RRSP/RRIF balances are generally fully income-included on the final return unless rolled to a spouse.

Relieving double taxation

Relief flows through the Canada–US income-tax treaty (Article XXIX B): a Canadian decedent is given the US unified credit prorated by US-situs ÷ worldwide estate, and the two systems (US estate tax vs. Canadian capital-gains-at-death) are coordinated so the same value is not fully taxed twice.

The traps that catch US–Canada families

• Situs of shares. Shares in a US company are US-situs for a non-resident alien even if held through a foreign broker — a common six-figure surprise.
• The non-citizen spouse. The unlimited US marital deduction does not apply to a non-US-citizen spouse without a QDOT.
• Double filing. A US person's foreign estate can still owe US Form 706; a large gift/bequest from a foreign person to a US recipient can trigger US Form 3520.

See your own numbers

HeirCalc models the US and Canada sides together — applying the exemptions, residence and situs rules and any treaty relief — and shows the exposure in each country with the statutory reason behind every figure. It runs entirely in your browser; nothing is saved or sent anywhere.

This guide is general information for 2026, not legal, tax, or financial advice. Cross-border estate and gift tax turns on precise facts — residence, domicile, situs, treaty positions, trusts and forced-heirship rules — that can change the outcome. Confirm your situation with a qualified cross-border professional. HeirCalc is an estimator by Krometis Analytics.