Executors of the estate of a deceased can be held personally liable for its tax arrears. That is why it is important that a legal representative of the estate, such as an executor, obtain a clearance certificate from Canada Revenue Agency (CRA) before the disposition of estate assets.
The issue of executor liability was more recently considered in the Tax Court of Canada decision in Mingle v. The Queen, 2022 TCC 34 (CanLII). In Mingle, the Appellant was a co-executor with his brother. The facts were distinct in that, 16 years following the death of the father, the Appellant sought to ensure his daughter benefited from the estate, and a mortgage against estate property was registered in her name. The Appellant had to sign documents indicating he was an executor to accomplish this.
However, the estate had an income tax liability and before he could distribute the respective assets the Appellant should have obtained a clearance certificate from CRA. This was not done prior to the mortgage and CRA issued a personal assessment against the Appellant for the tax arrears of the estate equal to the value of the property distributed. The Appellant countered that he was not an executor therefore the liability did not attach to him personally.