Can an executor be personally liable if they don't withhold enough tax before paying a non-resident beneficiary?

Yes, this is a real risk - an estate trustee who distributes property to or on behalf of a non-resident beneficiary without properly addressing the applicable federal withholding or clearance requirements can end up personally liable for the resulting tax shortfall, up to the value distributed. This mirrors the broader principle that distributing estate assets without first securing a CRA clearance certificate can expose a trustee personally, and non-resident situations add an extra layer of federal rules, such as the "section 116" concept for property dispositions, that can be easy to miss if the trustee isn't looking for them.

This risk exists whether or not the trustee realized a beneficiary's residency status mattered - not knowing about the rule doesn't erase the exposure. Because the exact withholding mechanics and rates are set by the CRA and can be technical, and because this content deliberately does not state a specific percentage, a trustee facing this situation should not attempt to calculate an amount to withhold on their own.

The safer approach is to identify early whether any beneficiary is a non-resident, flag any Canadian property involved, particularly real estate, and get a cross-border tax advisor and the estate's lawyer involved before finalizing any distribution - this is far cheaper than untangling personal liability afterward.