When does an executor need a CRA clearance certificate, and what does skipping it cost?
An executor needs a CRA clearance certificate before distributing estate property: s.159(2) of the Income Tax Act requires one, and distributing without it makes the executor personally liable for unpaid tax up to the value distributed. As of October 2026, file Form TX19 after the returns are assessed and paid or secured; the CRA quotes up to 120 days.
When should the executor ask for the clearance certificate?
Only once the tax side of the estate is finished. The CRA wants the required returns filed and assessed, any reassessment you asked for received, every balance paid or secured, and proof of the executor's authority on file. It also says plainly not to send the request at the same time as the returns canada.ca.
| Step | What happens | Timing |
|---|---|---|
| 1. File the final T1 and any optional returns | Due dates are on the final return page | Before anything else |
| 2. File the estate's T3 returns | For each year the estate has to file | As they fall due |
| 3. Receive every notice of assessment | Plus any reassessment you requested | Do not file TX19 before this |
| 4. Pay or secure the balances | Income tax, CPP, EI, interest and penalties | Before the request |
| 5. Prove the executor's authority | Death certificate, will or probate, deceased's SIN on each document | Generally processed within 28 business days |
| 6. Submit Form TX19 (and GST352 if the deceased had a GST/HST number) | With the supporting documents below | After steps 1 to 5 |
| 7. CRA acknowledgement letter | Confirms the file is open | Within 45 days |
| 8. CRA decision | Certificate, or a letter listing what is missing; an audit may come first | Up to 120 days if the file is complete |
| 9. Distribute | Complete the transfers | As soon as possible after the certificate |
The 45 day and 120 day figures come from the CRA's clearance certificate page, current as of October 2026 canada.ca. The 28 business days in step 5 come from the CRA's page for representatives of a deceased person
canada.ca. After the certificate arrives, the CRA expects the actual distribution to happen as soon as possible
canada.ca.
What does the CRA want attached to Form TX19?
Form TX19, Asking for a Clearance Certificate, is the request for estates, trusts and corporations; the current version was updated June 2026 canada.ca. For an estate, the CRA asks for this package
canada.ca:
| Document | Detail |
|---|---|
| Will | Complete signed copy with codicils, renunciations, disclaimers and probate documents |
| No will | The court document appointing the administrator |
| Assets at the date of death | Including jointly held assets and RRSPs or RRIFs with a named beneficiary, each with ACB and FMV |
| Distribution to date | A statement of what has already gone out |
| Proposed distribution | Of any holdback or residual amount or property |
| Beneficiaries | Names, addresses and tax identification numbers for anyone receiving property other than cash |
| Authority | Proof the applicant is the legal representative |
| Form AUT-01 | Only if the CRA should deal with you, a lawyer or a notary offline; signed by every legal representative |
| Form GST352 | Only if the deceased had a GST/HST number |
On the form itself, the CRA wants the deceased's full name, last address, SIN and date of death canada.ca.
You can submit through Represent a Client: choose "Submit documents", pick "Representative related" and answer no to the case number question. The executor can also use their own My Account (topic "Other"), or mail or fax the package to the clearance office for the region canada.ca. To act online for the estate, set up access first; the Represent a Client page covers that.
How much does the executor owe if they distribute without one?
Every unpaid amount, up to the value of the property distributed. Section 159(3) makes the representative personally liable "to the extent of the value of the property distributed", and the Minister may assess the representative for it at any time laws-lois.justice.gc.ca. The CRA adds that the liability covers amounts assessed before or after the distribution, and that interest runs on the amount assessed
canada.ca.
Worked example. An estate is worth $400,000. The executor pays $360,000 to the beneficiaries without a certificate and keeps a $40,000 holdback. The CRA later reassesses the final T1 for $55,000 more tax on an unreported gain. The holdback covers $40,000, leaving $15,000 unpaid. The executor distributed $360,000, which is more than $15,000, so the executor is personally liable for the full $15,000 plus interest.
| Scenario | Unpaid after the estate pays | Value distributed without a certificate | Executor personally liable for |
|---|---|---|---|
| A: holdback too small | $15,000 | $360,000 | $15,000 plus interest |
| B: small distribution | $15,000 | $10,000 | $10,000 (the cap) |
| C: nothing distributed yet | $15,000 | $0 | $0 personally; the estate still owes it |
Watch the executor who is also a beneficiary. Under s.159(3.1), appropriating estate property is deemed a distribution, so an executor who moves the cottage into their own name has distributed it laws-lois.justice.gc.ca. The requirement doesn't apply to a trustee in bankruptcy, which s.159(2) carves out.
Which payments need a certificate, and which do not?
Interim distributions are allowed without a certificate each time, as long as the executor keeps enough property to cover any liability canada.ca. That is why the holdback matters: size it for the worst plausible reassessment, including the deemed disposition on death covered in the deemed disposition page. Canada has no inheritance tax, so these returns are where the tax on death is actually collected.
Paying or allocating trust income to a beneficiary is not a distribution of property for this rule, so the estate's annual income payouts don't need a certificate canada.ca.
The certificate covers only the property the executor controlled, from when they took control to when they asked. If more assets turn up later that change the income or gains on the deceased's returns, the executor needs another certificate before distributing them canada.ca.
An insolvent estate generally can't get one. The CRA says it will not usually issue a certificate when the estate lacks enough assets to pay what it owes canada.ca.
What changes if the deceased was a GST/HST registrant?
Add Form GST352, Application for Clearance Certificate, which is the request under s.270 of the Excise Tax Act canada.ca. Section 270 mirrors the income tax rule: a representative who distributes without the certificate is personally liable "to the extent of the value of the property or money so distributed"
laws-lois.justice.gc.ca.
The CRA asks for the GST352 when the deceased had a GST/HST number, and its help line for GST/HST and T2 certificates is 1-800-959-5525 canada.ca.
What if the distribution itself creates tax in the estate?
Use the chosen date route. Where s.106(3), s.107(4) or s.107(5) applies, the estate's tax depends on fair market value on the day it distributes, so the CRA lets you fix a distribution date in advance, compute the tax as if the property went out that day, file the final return for the year ending on that date, pay, and commit in writing to transfer everything promptly after the certificate canada.ca.
Once the certificate issues, the CRA treats the chosen date as the distribution date, and the executor holds the property for the beneficiaries from then on. If the distribution date depends on the final assessment, for example a business that keeps earning income, contact the tax services office where you file TX19 to arrange another approach canada.ca. The estate's own rates and year end are on the graduated rate estate page.
Sources
Is a clearance certificate legally required, or just recommended?
The Act says the legal representative shall get one before distributing property (s.159(2)) laws-lois.justice.gc.ca. The consequence it attaches to skipping it is s.159(3): personal liability for the unpaid amounts, capped at the value distributed.
What if the CRA has not answered after 120 days?
Call. The CRA says to contact it if you have no certificate, denial or reply within 120 days: 1-800-959-8281 for a T1 or T3 file, 1-800-959-5525 for T2 or GST/HST canada.ca. If it denies the request, the letter lists what's missing and you can apply again.
Can the accountant file the TX19 instead of the executor?
Yes. A representative can submit it through "Submit documents" in Represent a Client, and doesn't need electronic access to the client's account to do so canada.ca. For the CRA to talk to you or mail you the certificate, the legal representatives must authorize you, online or on Form AUT-01.
Does the certificate cover assets found after it was issued?
No. It covers only the property the executor controlled up to the request, so newly found assets that change the deceased's income or gains need another certificate before they go out canada.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.