Death, Taxes, and Clearance Certificates

Estate trustees are required to file unfiled income tax returns for the deceased for the period while they were alive as well as for the estate of the deceased after their death. Estate trustees can also be responsible for the payment of any unpaid taxes. That is why, for instance, estate trustees do not generally distribute the assets of the estate until they are satisfied that no tax liabilities exist, or until they hold sufficient funds to pay them.

To protect themselves from liability to the Canadian Revenue Agency, most estate trustees obtain a clearance certificate. This certificate confirms that the taxes owing by the deceased and the deceased’s estate have been paid. Generally, the application to the federal government for a clearance certificate is submitted after all tax liabilities have been paid and a “nil” return has been received by the estate trustee.

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To obtain further information on how to obtain a clearance certificate, CLICK HERE.