A tax provision that allows capital property to transfer to a surviving spouse or common-law partner — directly or through a qualifying spousal trust — at the deceased's adjusted cost base rather than at fair market value. The effect is to defer the capital-gains tax that the deemed disposition on death would otherwise trigger: no gain is taxed on the first death, and the gain is only realized later, when the surviving spouse sells the property or dies.
The rollover postpones the tax rather than eliminating it, so the eventual liability still has to be planned for on the second death or sale.