Scotia iTRADE adjusted cost base

A holding that arrives from an estate does not bring its old cost base with it. That is the single most important thing to know before the first sale, and it runs the opposite way for a spouse than for anyone else.

None of this is a problem with any broker. It is what the rule asks for. This page is about what a beneficiary starts from. For the calculation itself, read adjusted cost base explained first.

What happens to the holding at death

Capital property is treated as having been disposed of immediately before death at its fair market value. That is a deemed disposition: nothing was sold, no cash moved, and a gain or loss is still realised and reported on the deceased person's final return.

The consequence for whoever receives the holding is that its cost base is generally that same fair market value, not what the original owner paid. A portfolio held for forty years arrives with its history settled, and the beneficiary starts fresh from the value on that date.

Record that value on day one. It is the number every future calculation depends on, it is easiest to establish at the time, and reconstructing a market value for a date years in the past is far harder than writing it down was.

A spouse is the exception, and it runs the other way

Where the property passes to a spouse, common-law partner or a qualifying spousal trust, the deemed proceeds are the property's adjusted cost base rather than its market value.

So the surviving spouse inherits the cost base itself, carrying every purchase, every reinvested distribution and every return of capital that built it. Nothing is realised at death, and the deferred gain travels with the holding until the spouse eventually sells.

Two things follow that people find surprising:

• There is no step up for a spouse. The relief is a deferral, and a large unrealised gain remains attached to the holding rather than being wiped clean.
• The legal representative can elect out of it, treating the transfer at fair market value instead. That realises the gain on the final return, which is sometimes the better answer and is always a deliberate decision rather than a default.

⚠️ Which treatment applies is not something to infer from who ended up with the shares. It follows the relationship and the terms, and the election is made on the deceased person's return. This is the part to confirm with the accountant handling the estate rather than to assume from a statement.

Then it is an ordinary holding, pooled with the rest

Once you hold it, nothing about its origin makes it special.

Identical property pools per taxpayer, not per account, so inherited units of a security you already own merge into one pool with your existing units at their new cost base. Your average moves the day they arrive, and it moves again on the next purchase anywhere.

Adjusted cost base across two brokerages works through the arithmetic of pooling, which is the step people skip when a holding feels like it belongs in a separate mental account.

Registered accounts are a different regime

An RRSP, RRIF or TFSA on death is governed by beneficiary and successor designations rather than by the rules above, and adjusted cost base is not the question there at all. Nothing on this page applies to them, and the treatment differs enough that it is worth asking specifically.

Reading the slip against your own number

A T5008 reports proceeds per account, and box 20 is where a cost amount would sit. On an inherited holding it is particularly likely to be wrong or empty: the institution may carry a cost from the previous owner, or none at all, and neither is your cost base.

T5008 box 20 and your ACB explains how to read the two together, and the T5008 and cost base checker shows the Schedule 3 totals each version implies.

Getting the history into one place

Scotia iTRADE does not connect to Luum. The brokerage connection Luum uses does not reach it. The route that works is the upload: every plan takes a holdings file and a transaction history import.

For an inherited holding the starting point is a value on a date rather than a history of purchases, so what matters most is recording that figure correctly and carrying it forward. How connections work lists which institutions connect directly today, and the ACB tracker is where that figure is carried forward, pooled with everything else you hold in the same security.

This page is educational and is not tax advice. Estates depend on the will, the relationships and elections made on the final return, none of which this page can know. Confirm the treatment with the CRA or with the professional administering the estate before you file or sell.

Common questions

What is my cost base on shares I inherited?

Generally the fair market value of the shares immediately before the previous owner's death, rather than what they originally paid. Death triggers a deemed disposition at that value on the deceased person's final return, and the beneficiary starts from it. The exception is a surviving spouse or common-law partner, who instead inherits the original adjusted cost base and the deferred gain along with it.

Do I pay tax when I inherit shares in Canada?

Canada has no inheritance tax, and that is not the same as nothing being taxed. The deemed disposition at death is reported on the deceased person's final return, so the tax on the gain accrued during their lifetime is settled by the estate. What you owe begins from your own starting cost base, on the growth from that point forward.

Does my spouse get a new cost base on shares left to them?

No, and this is where the rules run opposite to the general case. Property passing to a spouse, common-law partner or qualifying spousal trust transfers at the deceased person's adjusted cost base rather than at market value, so there is no step up and the unrealised gain carries over. The legal representative can elect out of that treatment and realise the gain on the final return instead, which is a deliberate decision with a tax cost now.

Do inherited shares pool with shares I already own?

Yes. Identical property pools per taxpayer, so inherited units of a security you already hold merge into a single pool with your existing units at their new cost base, and your weighted average changes on the day they arrive. They do not stay a separate lot you can sell independently, because Canada does not allow specific-lot identification.