Parliament recently enacted significant changes, beginning in
2016, to the taxation of estates, trusts and charitable giving on
death. If your estate plan includes trusts or charitable
giving, or if you are an executor or a trustee, you may be affected
by these changes and you should seek legal advice.
ESTATES
Income Taxed at Top Marginal Rate
At the present time, the income of an estate is subject to tax
at graduated rates, that is, the rate of tax increases as the
amount of the estate's income increases, until the estate's
annual income exceeds $150,000. Income greater than that
amount is taxed at the top marginal rate of 45.8% (in British
Columbia, to be reduced in 2016 to 43.7%). Beginning in 2016,
all of an estate's income will be subject to tax at the top
marginal rate. Estates that are "graduated rate
estates" or "GREs", however, will have their income
taxed at graduated rates, but only for the first 36 months after
the deceased's death.
