At: The date of death
Which returns, and by when
You don’t know which returns are due for the person who died, or by when.
What we do
The final T1 return for the year of death, reporting income up to the date of death.
Estates & Trusts
When someone dies, their executor or other legal representative becomes responsible for filing their last returns and the estate’s own. We prepare the final return, the estate’s T3 returns and any trust returns, and help you ask the CRA for a clearance certificate before you distribute the estate, so you know what is owed before the money goes out. The tax side is our work; the will, probate and an executor’s legal duties are for the estate’s lawyer.
Where estate and trust tax comes into play after a death
The points where this service comes into play are numbered.
- Stage 1The date of deathIncome up to the date of death goes on a final return.1
- Stage 2Missing yearsEarlier years the person never filed.2
- Stage 3Property at deathCapital property is treated as sold at death, unless it passes to a spouse or common-law partner and the conditions for the rollover are met.
- Stage 4The estate’s returnsT3 returns for the estate and any trusts.3
- Stage 5ClearanceA clearance certificate before the estate is distributed.4
- Stage 6DistributionA beneficiary who has been told to wait for a clearance certificate and wants to understand why.
Numbered points are explained below.
The four points, explained
At: Missing years
Earlier years first
Earlier years were never filed, and they need to be filed and assessed before a clearance certificate can be requested.
What we do
Returns for earlier years the person had not filed.
At: The estate’s returns
The family trust’s T3
A family trust has a T3 return due and nobody is sure what it needs to report.
What we do
T3 returns for the estate, including a graduated rate estate, and for testamentary and family trusts.
At: Clearance
Before you distribute
The estate is ready to be distributed, but you have been warned you could be personally liable for tax the estate still owes.
What we do
Form TX19, the request for a clearance certificate, once the notices of assessment have arrived and the balance is paid.
What the engagement includes
Request a proposal- The final return
The final T1 for the year of death, reporting income up to the date of death.
- Earlier years
Returns for years the person had not filed.
- Property at death
The deemed disposition of capital property, and the rollover to a surviving spouse or common-law partner where the conditions for the rollover are met.
- Estate and trust returns
T3 returns for the estate and for testamentary and family trusts, such as a graduated rate estate.
- Clearance
The request for a clearance certificate, such as Form TX19, once the estate’s taxes are assessed and paid.
- Support for the executor
The returns due and their dates, what the CRA needs from you, and plain answers for beneficiaries.
- Something not listed?
Ask us. If it is Canadian tax, bookkeeping or advisory work, we will tell you plainly whether we can help.
How it runs
First conversation
We learn what the person owned, what was filed in recent years, and what the will says about the estate and any trusts.
Returns map
We list every return due for the person and the estate, with its due date.
Documents
You gather the slips, statements and records on our list; we tell you where to ask for anything missing.
Preparation and sign-off
We prepare the returns, go through them with you as executor, and file once you approve.
Clearance certificate
Once the notices of assessment have arrived and the balance is paid, we prepare Form TX19 so you can request the certificate before the final distribution.
When is the final return due?
If the person died between January 1 and October 31, by April 30 of the following year. If they died in November or December, six months after the date of death. Later dates apply where the person or their spouse or common-law partner ran a business.
When is the estate’s T3 return due?
Within 90 days after the end of the estate’s tax year. For a graduated rate estate, the executor can choose a first tax year-end up to 12 months after the death.
Do I need a clearance certificate?
It confirms that the estate has paid what it owes the CRA. If you distribute the estate without one and tax turns out to be owing, you can be personally liable, up to the value of what you distributed.
Can you deal with the CRA for the estate?
Yes, once the CRA has you on record as the legal representative and you authorize us. We then deal with the CRA on the person’s and the estate’s files and tell you what each letter means.