What Does a CRA Clearance Certificate Cover in Canada?

As an executor, you may be told to get a clearance certificate from the Canada Revenue Agency (CRA) before handing out the estate. It helps to know exactly which debts the certificate speaks to, because that decides what you have to settle first.

This article explains the amounts the certificate covers, what CRA expects to be done before it issues one, and the limits of what it confirms. It is general information, not advice on your estate.

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

What the certificate confirms

A CRA clearance certificate confirms that an estate, trust or corporation has paid all income tax, GST/HST, interest and penalties owed at the time the certificate was issued, or that the Minister has accepted security for payment.

It matters because a legal representative must obtain the certificate before distributing property in their possession or control. A legal representative is someone who administers, winds up, controls or otherwise deals with a property, business or estate, and whether you qualify depends on the facts.

Which amounts are covered

The certificate covers income taxes, interest, penalties, CPP contributions and EI premiums. The tax that CRA administers for a province or territory is part of what must be paid or secured before you apply.

If the deceased had a GST/HST number, Form GST352 is needed as well as Form TX19, and for GST/HST only you use Form GST352. The Excise Tax Act requires a representative to obtain a GST/HST certificate before distributing property or money, failing which they are personally liable up to the value distributed.

What must be settled before CRA issues it

CRA does not issue the certificate for an estate unless the required returns are filed and assessed and all amounts are paid or secured. You apply only after the following steps are done:

• The required returns are filed and the notices of assessment are received.
• Any reassessments you requested are received.
• All income taxes, CPP contributions, EI premiums, interest and penalties are paid or secured.
• Legal documents proving your status as representative are submitted.

Do not send the request in with the tax returns, because that delays their assessment. Exceptions to the timing rule exist in the CRA circular, so ask a lawyer or accountant if you think yours applies.

What the certificate does not do

• It is generally not issued if the estate cannot cover all tax, interest and penalties owing.
• It covers only property controlled up to the request date, so property discovered later needs another certificate before you distribute it.
• It is not needed for trust income paid or allocated to beneficiaries, because that is not a distribution of property.
• Once it is issued, liability for any remaining tax rests on the estate, trust, beneficiaries or others who received the assets, rather than the representative.

What to do next

Start by listing every tax account the deceased had, including any GST/HST number and any business or payroll accounts. Confirm with CRA or an accountant whether anything beyond income tax, CPP, EI and GST/HST is outstanding.

• File the final and any earlier returns and wait for the notices of assessment.
• Pay or arrange security for all balances.
• Gather the will, probate or appointment documents and an asset list.
• Apply on Form TX19, plus Form GST352 if there is a GST/HST number.

Frequently asked questions