As executor, you are personally liable for filing the deceased’s final income tax returns and paying any taxes owed before distributing the estate.
Executor Tax Timeline
| Timing | Action | Form/Filing |
|---|---|---|
| Immediately | Notify CRA of death (call 1-800-959-8281) | Phone + letter |
| Immediately | Notify financial institutions, CPP/OAS, employer | Death certificate |
| Within 30 days | Apply for CPP death benefit ($2,500) | ISP1200 |
| Within 90 days | File T3 Direct Deposit form (optional) | T3DD |
| By April 30 (or 6 months after death) | File final T1 return | T1 |
| By April 30 (following year) | File optional elective returns (rights or things) | T1 |
| Within 90 days of T3 year-end | File T3 trust return (if estate earns income) | T3 |
| Before distributing assets | Request clearance certificate | TX19 |
| After clearance received | Distribute remaining assets to beneficiaries | — |
Filing Deadlines for Final Return
| Date of Death | Final Return Deadline | Notes |
|---|---|---|
| Jan 1 – Oct 31 | April 30 of following year | Standard deadline |
| Nov 1 – Dec 31 | 6 months after date of death | Extended deadline |
| Self-employed (Jan 1 – Dec 15) | June 15 of following year | Self-employment deadline |
| Self-employed (Dec 16 – Dec 31) | 6 months after date of death | Extended |
Deemed Disposition: Tax on Death
| Asset Type | Tax Treatment on Death | Exception |
|---|---|---|
| Principal residence | Exempt (PRE applies) | Must designate on final return |
| Investment property | Deemed sold at FMV → capital gain | Can roll to spouse (tax-free) |
| Stocks/ETFs | Deemed sold at FMV → capital gain | Can roll to spouse |
| RRSP/RRIF | Full balance included as income | Roll to spouse or dependent child |
| TFSA | Tax-free to beneficiary/successor | Successor holder continues TFSA |
| Business assets | Deemed sold at FMV | Various rollovers available |
| Personal property (over $1,000) | Deemed sold at FMV | Under $1,000 exempt |
| Depreciable property | Recapture + capital gain possible | Roll to spouse |
RRSP/RRIF on Death
| Scenario | Tax Treatment |
|---|---|
| Spouse is beneficiary | Tax-free rollover to spouse’s RRSP/RRIF |
| Financially dependent child/grandchild (under 18) | Transfer to term annuity to age 18 |
| Financially dependent child (infirm) | Transfer to RDSP or annuity |
| Adult child is beneficiary | Full RRSP/RRIF included in deceased’s income |
| Estate is beneficiary | Full RRSP/RRIF included in deceased’s income |
| No beneficiary designated | RRSP/RRIF goes to estate; full income inclusion |
RRSP/RRIF Tax Example
| Item | Amount |
|---|---|
| RRSP/RRIF balance at death | $500,000 |
| Other income in year of death | $50,000 |
| Total income on final return | $550,000 |
| Approximate federal + provincial tax (ON) | ~$215,000 |
| After-tax to beneficiaries | ~$335,000 |
Optional Elective Returns
| Return Type | What It Covers | Benefit |
|---|---|---|
| Rights or things (T1) | Income earned but not received before death (vacation pay, dividends declared pre-death, matured bond coupons) | Second set of graduated tax brackets |
| Deceased partner/proprietor (T1) | Business income from fiscal year ending after death | Separate return for business income |
| Testamentary trust beneficiary (T1) | Trust income from trust year ending after death | Separate graduated brackets |
Each elective return gets its own basic personal amount and graduated tax brackets — potentially saving $5,000–$15,000+ in tax.
Clearance Certificate
| Detail | Information |
|---|---|
| What it is | CRA confirmation that all taxes are paid or secured |
| Why you need it | Protects executor from personal liability |
| Form | TX19 |
| When to apply | After filing ALL returns (final T1, T3, any elective) |
| Processing time | 4–6 months (sometimes longer) |
| Required documents | Death certificate, will, final returns, list of assets, list of distributions |
| Consequence of skipping | Executor personally liable for unpaid tax |
Probate Fees by Province
| Province | Probate Fee | Example ($500,000 estate) |
|---|---|---|
| Ontario | 1.5% over $50,000 | $6,750 |
| BC | 1.4% over $50,000 | $6,350 |
| Nova Scotia | 1.695% | $8,475 |
| New Brunswick | 0.5% | $2,500 |
| Saskatchewan | 0.7% | $3,500 |
| Manitoba | 0.7% (over $10,000) | $3,430 |
| Alberta | $525 max | $525 |
| Quebec | $0–$217 (notarial will) | $0 (if notarial will) |
| PEI | 0.4% | $2,000 |
| Newfoundland | 0.6% | $3,000 |
Estate Administration Checklist
| Task | Status | Notes |
|---|---|---|
| Obtain multiple death certificates (5–10) | ☐ | Needed for banks, CRA, land registry |
| Locate will and confirm executor | ☐ | Review with estate lawyer |
| Apply for probate (if needed) | ☐ | Depends on assets and province |
| Notify CRA of death | ☐ | Call + Form RC4111 |
| Cancel CPP/OAS/GIS payments | ☐ | Service Canada |
| Apply for CPP death benefit ($2,500) | ☐ | ISP1200 |
| Notify banks and freeze accounts | ☐ | Present death certificate |
| Inventory all assets and debts | ☐ | Real estate, investments, accounts |
| Publish notice to creditors | ☐ | Required in some provinces |
| File final T1 return | ☐ | By April 30 or 6 months after death |
| File elective returns (if beneficial) | ☐ | Consult accountant |
| File T3 trust return (if estate income) | ☐ | 90 days after trust year-end |
| Obtain clearance certificate (TX19) | ☐ | Before final distribution |
| Distribute assets to beneficiaries | ☐ | After clearance certificate received |