A deemed disposition is when tax law treats you as having sold a property at fair market value even though no actual sale occurred, triggering a capital gain or loss.
Certain events trigger a deemed disposition, the tax system pretends you sold a property at its fair market value, so any accrued gain is taxed even without a real transaction. The most common triggers are death (a deemed sale of most assets on the final return), emigration from Canada, and a change in use of a property.
Deemed dispositions can create a tax bill with no cash to pay it, which is why estate and departure planning matters. Some deemed dispositions can be deferred or offset, for example a spousal rollover on death defers the gain until the surviving spouse disposes of the asset.
On death, a person is deemed to have sold their investment portfolio at fair market value. The accrued $200,000 gain is taxed on the final T1 return, even though the heirs have not actually sold anything.
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A tax return is the annual filing that reports your income, deductions and credits to the CRA so the final tax for the year can be settled. Payers withhold tax during the year and the return reconciles that against what you actually owe, producing either a refund or a balance to pay. For 2025 returns filed in 2026, refunds usually arrive in about two weeks for an online return, while a paper return runs on a considerably longer standard because it is handled manually.
Current and prior-year forms and publications are free to download from canada.ca, and tax software builds most of them for you as you enter your information. You can also order a paper package by phone or pick one up at participating postal and service outlets during filing season. Which forms apply depends on your situation: a T1 with your slips for employment income, T2125 for self-employment, a T2 for a corporation, T1-ADJ to change a return already filed.
Non-taxable income is money you receive that never enters taxable income. Common examples are lottery and most gambling winnings, gifts and inheritances, growth and withdrawals inside a TFSA, the GST/HST credit and Canada child benefit, most life insurance death benefits, and child support under current-rule agreements. A few amounts are reported and then deducted, such as workers' compensation and social assistance, because they still affect benefit calculations, so report anything that arrives on a slip even when no tax results.
GST is the federal 5% goods and services tax, charged across Canada for 2026. HST is that same federal tax combined with a participating province's sales tax into one rate: 13% in Ontario, 14% in Nova Scotia since 1 April 2025, and 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island. Registration, input tax credits, and the treatment of exempt and zero-rated supplies are identical, and both go on the same return. Place of supply decides which you charge.
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Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.
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