Following your death, your executor will be responsible for ensuring that your tax return for the calendar year in which you have died is prepared and filed. At the same time, your executor will also be required to file final tax return which effectively “closes your account” at the Canada Revenue Agency. This return will deal with any taxable dispositions that resulted from your death, such as capital gains that must be paid if you held any capital investments at the time of your passing. Following the filing of the final return, a clearance certificate is issued by the Canada Revenue Agency which then allows the executor to complete distribution of the estate. Executors can be held personally liable for ensuring that the tax returns are prepared accurately and the tax owing is paid.
