Even after a person has passed away, an obligation is still owed to the Canada Revenue Agency. In fact, the CRA is one of the most important contacts to be made by the executor during the process of estate administration. There are many final tax-related details that need to be taken care of after a taxpayer dies in British Columbia.
As the legal representative of the deceased, one needs to submit the date of death to the CRA as soon as can be managed. This can be done with a simple phone call, or by submitting a Request for the Canada Revenue Agency to Update Records form. A copy of the death certificate should also be sent in, along with proof of representation, such as the will or the grant of probate. As a side note, Service Canada should also be provided with the date of death.
It will be necessary, as the legal representative, to file taxes for any years the deceased did not file, file the deceased’s final tax return and pay any taxes owing from the estate. Some assets bequeathed by the deceased may be taxable, and it is up to the legal representative to inform beneficiaries if they have to pay taxes on anything left to them. In addition, the legal representative must claim any fees they receive as executor on a T4 slip when filing his or her own taxes.
Settling the tax situation of a deceased individual involves many steps and a lot of paperwork. It can be challenging for anyone with only a passing familiarity with the CRA and the taxation system. Having the assistance of experienced professionals from a British Columbia law firm can make this and other aspects of estate administration easier to understand.
Source: cra.arc.gc.ca, “Legal representative”, Accessed on Dec. 19, 2016