An important item for people to understand is the tax consequences when withdrawals are made. All withdrawals are considered ordinary income taxed at your full marginal tax rate regardless of the original type of income.For many people, the more important item to factor in is the tax consequences upon death. Effective January 1, 2020, a new top personal income tax rate was introduced in B.C. This increase essentially adds an additional 3.7 per cent tax to many estates final taxes.When a registered account owner dies, the total value of their registered account is included in the owner’s final tax return. The final tax return is often referred to as a terminal tax return. The proceeds will be taxed at the owner’s marginal tax rate. The highest marginal tax rate is currently 53.5 per cent (British Columbia 20.5 per cent and federal 33 per cent).
Source: Kevin Greenard: Increase in B.C. taxes results in harsh tax on death | Times Colonist
