🇨🇦 Canada · 5 min read · Published 2026-09-07 · Updated 2026-09-07

Written by Jordan Reeves · Editorial review: automated source and figure checks (how we check this)

Sources last verified: 2026-09-07

What Is a Rights and Things Return?

An optional separate return for amounts owed to the deceased at death but not yet received. Filing one splits income across two returns, and because most personal credits can be claimed on each, the total tax can be materially lower than filing everything together.

60-SECOND ANSWER

Optional returns split a deceased person's income across separate filings, each claiming its own personal credits.

The answer:: Amounts owed but unpaid at death — unpaid salary, declared dividends, matured coupons — can go on a separate return.
The trap:: Missing the deadline. The optional return is due at the later of one year after death and the final return's due date.
The recommendation:: Ask the accountant whether any optional return is available, because it is elective and nobody files it by default.

Jump to the detail ↓

Where the AI summary above gets this wrong

"A deceased person files one final tax return."

That's surface-true. Here's what it misses:

Up to four returns can be filed — The final return plus optional returns for rights and things, a partnership or proprietorship, and income from a testamentary trust.
Personal credits repeat on each — Most non-refundable personal credits can be claimed in full on each return, which is where the saving comes from.
The graduated rates restart — Splitting income across returns means each set of brackets is used from the bottom, lowering the marginal rate on the total.

→ See what a lower marginal rate saves

01 What counts as rights and things

Rights and things are amounts the deceased was entitled to at death but had not yet received: unpaid salary or vacation pay, dividends declared but unpaid, matured but uncashed bond coupons, and unpaid harvested crops or livestock in a farming business.

They are excluded from the final return if the executor elects to file a separate return for them. The election is made by filing, and it is a choice rather than a requirement.

Source: What to do when someone has died

02 Why splitting saves tax

Most non-refundable personal credits — the basic personal amount, the age amount, the pension income amount — can be claimed in full on each return filed. Filing two returns therefore claims those credits twice.

Each return also runs through the tax brackets from the bottom, so income that would have been taxed at a high marginal rate on a single return is taxed at a lower one when split. The effect can be substantial where the final return is already large from a registered account inclusion — the mechanism is in the final return.

WORKED EXAMPLE · Try the numbers

Shows: what a given amount of additional taxable income costs you in tax at your marginal rate, and what you keep. Ignores: provincial surtaxes, credits that phase out with income, and any effect on income-tested benefits.

Amount ($)

Your marginal rate (%)

What you keep after tax

$6,700

At a 33% marginal rate, $10,000 costs $3,300 in tax and leaves $6,700.

Source: What to do when someone has died

03 The deadline and the other options

The rights and things return is due at the later of one year after the date of death and ninety days after the notice of assessment for the final return. Missing it forfeits the option entirely.

Two further optional returns exist, for income from a testamentary trust and for a partnership or proprietorship with a non-calendar fiscal year end. All of them are elective, and none is filed unless someone identifies the opportunity — the executor's broader obligations are in an executor's tax responsibilities.

The optional return is a full return in its own right, with its own filing and its own assessment, rather than a schedule attached to the final one. Preparing both together is what makes the credit allocation deliberate, because each credit can be claimed on one return or split across them. How the credits are allocated between the returns is the executor's choice, and recording it on the estate file stops a later review treating it as a duplicate claim.

Source: Canadian income tax rates for individuals

Nobody files these by default because nobody is required to, and the saving is real for an estate with unpaid salary or a declared dividend outstanding. It is one of the few places in the tax system where doing extra paperwork reliably lowers the bill.