Is an Executor Personally Liable for Unpaid Tax Without a CRA Clearance Certificate in Canada?

This answer covers Canadian federal tax law, which applies in every province.

Yes. An executor who distributes property without a CRA clearance certificate is personally liable for the unpaid tax, up to the value of what was distributed. CRA can assess the representative for that amount at any time.

Before distributing property in their possession or control, a legal representative must obtain the certificate. Distribution happens when you give up control and transfer the property, and appropriating property also counts. The liability applies whether the tax is assessed before or after the distribution, and interest accrues. You are also jointly liable with the taxpayer, to the extent of your control of the property. A parallel GST/HST rule applies if the deceased had a GST/HST number.

Trust income paid or allocated to beneficiaries is not a distribution of property, so no certificate is needed for it. Once a certificate is issued, remaining liability rests on the estate and those who received the assets, not the representative. A certificate is not needed before each distribution if enough property remains to cover any liability. Who counts as a legal representative depends on the facts. A lawyer or accountant can confirm your position.