How Long Does CRA Take to Issue a Clearance Certificate in Canada?

If you are an executor waiting on a clearance certificate, you probably want to know when you can finally distribute the estate. The honest answer is that it takes months rather than weeks, and it can take longer.

This article explains the timelines CRA publishes, what can slow a request down, and how to follow up. The rules are federal and apply across Canada.

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

CRA's published timelines

CRA acknowledges the request within 45 days. Assessment can take up to 120 days if all documents are provided, and an audit may be needed first.

Treat these as targets, not promises. They are CRA's own figures and can change, so check the current CRA guidance when you apply. Planning for the full 120 days, and possibly more if an audit is needed, is safer than hoping for a quick turnaround.

For an estate, the request is made on Form TX19. Form GST352 is also needed if there is a GST/HST number. IC82-6R13 says not to file Form TX19 until the notices of assessment are received, subject to exceptions listed in the circular. Filing at the right time is one of the simplest ways to avoid a slow start.

What can slow things down

Some delays are within your control. Others are not.

• Applying too early. CRA does not issue the certificate unless the required returns are filed and assessed and all amounts are paid or secured.
• Sending the request with the tax returns, which delays their assessment.
• Missing documents, such as the will, proof of your status as representative, the asset list or the statement of distribution.
• An audit, which may be needed before the request is assessed.
• An estate that cannot cover all tax, interest and penalties owing. The certificate is generally not issued in that case.

Late returns can also create problems. A late T3 return may attract a separate penalty of $25 per day, with a minimum of $100 and a maximum of $2,500, even with no balance owing. Filing the estate's returns on time keeps the certificate on track.

The T3 return is due 90 days after the trust's tax year-end, or after the final distribution if the trust ceases to exist. Because the certificate depends on those returns being filed and assessed, their timing affects when you can apply.

How to follow up

If no certificate has arrived, it was denied, or no officer has contacted you within 120 days, phone 1-800-959-8281 for an individual T1 or trust T3 file, or 1-800-959-5525 for a corporation T2 or GST/HST file.

If CRA asks for more documents, send them with a cover page naming the requesting officer and their tax services office. Have the deceased's SIN and the details of your original submission ready when you call.

You can submit documents online in Represent a Client by choosing Submit documents, then Representative related, and answering No to the case or reference number question. Executors can also use their own My Account, choosing Submit documents, answering No and selecting Other. Alternatively, you can mail or fax to the regional tax services office.

If the request is denied or new assets turn up

A denial states what is missing or what action is required. You can reapply once the issues are resolved.

If new assets or property are discovered after a certificate is issued, you must obtain another certificate before distributing them, by contacting the tax services office where the original request was filed. A certificate covers only property controlled up to the request date.

What to do while you wait

Until the certificate arrives, distributing estate property puts you at personal risk. Without a certificate, you are liable for unpaid amounts up to the value of the property distributed, whether assessed before or after the distribution, and interest accrues.

A representative need not obtain a certificate before each distribution if enough property remains to cover any liability. CRA gives no formula for how much to hold back, so any figure is a judgement call best made with a lawyer or accountant.

If tax is owing but not yet paid, the certificate can still issue where the Minister has accepted security for payment. CRA's page does not set out the form or amount of acceptable security, so contact CRA first. Once a certificate is issued, liability for any remaining tax rests on the estate, trust, corporation, beneficiaries or others who received the assets, rather than the representative.

• Apply as soon as the assessments are in and all amounts are paid or secured.
• Send a complete package the first time.
• Diarize the 45-day and 120-day marks from the date you submitted.
• Keep beneficiaries informed so they know why the final distribution is delayed.
• Get advice before making any partial distribution.

Frequently asked questions