Canada: Capital Gains Tax

Canada does not generally impose a separate inheritance tax on beneficiaries. That does not mean death is tax-free. Under subsection 70(5) of the Income Tax Act, a Canadian taxpayer is generally deemed to dispose of each capital property at fair market value immediately before death, unless a specific rollover or other relieving rule applies.

If you are a Muslim homebuyer weighing a halal mortgage against a conventional one, the product that keeps you offside your faith may still put you offside the taxman in ways a conventional mortgage never would.

The Canada Revenue Agency’s access to information about cryptocurrency and other crypto-assets is entering a new phase. Canadian taxpayers have always been responsible for identifying, valuing, classifying, and reporting taxable crypto activity, even where an exchange issued no Canadian tax slip, the transaction occurred through a foreign platform, or the assets were never converted into Canadian dollars. 

For too long, Canadian tax law penalized business owners who wanted to keep their life’s work in the family. A sale to a stranger entitled the vendor to the lifetime capital gains exemption (LCGE) — currently $1,302,938 for 2026, indexed annually — sheltering over a million dollars of gain from tax.

As cryptocurrency continues to gain acceptance in commercial transactions, some Canadian employers have started compensating employees using digital assets such as Bitcoin or Ethereum.

The Supreme Court of Canada’s decision in Stewart v Canada, 2002 SCC 46, represents a foundational shift in Canadian tax law concerning what constitutes a “source of income” under the Income Tax Act.

Canadian crypto tax compliance has entered a fundamentally different phase—one driven by data visibility, artificial intelligence, and targeted enforcement. The longstanding assumption that cryptocurrency transactions operate outside regulatory reach is no longer credible.

Crypto in divorce in Canada presents unique hurdles for couples managing Bitcoin, Ethereum, and other digital assets amid separation.

Cryptocurrency has become a significant source of wealth for many Canadians. Whether an individual holds Bitcoin as a long-term investment, actively trades digital assets, participates in staking programs, or engages in decentralized finance (DeFi), cryptocurrency can create unique estate planning challenges that do not arise with traditional investments.