Executors and trustees must secure a CRA clearance certificate before distributing estate or trust assets, or they risk being held personally liable for unpaid tax. The clearance confirms that income taxes, GST/HST, interest and penalties have been paid or that acceptable security has been provided. Banks, lawyers and financial institutions commonly demand a certificate before releasing funds or transferring title. This guide explains who should apply, the CRA preconditions, the documents to assemble and the practical TX19 steps to protect an estate or trust while a clearance request is processed. Follow Canada.ca and TX19 instructions closely to avoid delays or personal exposure.

If a legal representative distributes property while amounts remain owing, they can be held personally responsible up to the value of the assets they distributed, because the Canada Revenue Agency issues a clearance certificate to confirm that all amounts under the Income Tax Act and Part IX of the Excise Tax Act are paid or secured.

1. When do you need a clearance certificate

The CRA issues a clearance certificate for three canonical situations: estates of deceased persons, trusts when property will be distributed, and corporations that are winding up or distributing corporate property. The certificate confirms that the estate, trust or corporation has paid all amounts owing under the Income Tax Act and Part IX of the Excise Tax Act, or that the Minister of National Revenue has accepted security for payment. For GST/HST registrants the same need for clearance applies when the business is closing and assets will be distributed.

A common trigger is distribution of non-cash property. Financial institutions and lawyers commonly require a clearance certificate before they will release funds or transfer title. For corporations that will continue to operate after a shareholder withdrawal or sale, the CRA may issue a comfort letter rather than a clearance certificate, but a clearance certificate is required when corporate property is actually being distributed.

Worked example: an executor preparing to distribute a residuary estate with shares and registered plans should plan for a TX19 request before transfers. If the estate hasn't enough assets to settle outstanding taxes, the CRA generally won't issue a clearance certificate, so alternative arrangements will be needed before distribution.

2. Preconditions to requesting clearance

Do not submit the clearance request at the same time as filing the related returns. The CRA instructs legal representatives to request a clearance only after all required tax returns have been filed and the related notices of assessment have been received. If you filed requests for reassessment, wait to receive the notices of reassessment before you apply.

The CRA won't process a clearance request until it sees that returns are filed and assessments or reassessments are complete.

You must have paid or provided security for all income taxes, including provincial or territorial taxes the CRA administers, and for Canada Pension Plan contributions and Employment Insurance premiums and any related interest and penalties, before the CRA will process a clearance request. If the CRA accepts security in place of payment, the certificate will reflect that arrangement.

Worked example: if outstanding CPP contributions apply to the final payroll of a deceased taxpayer who was an employer, the legal representative must arrange payment or acceptable security for those amounts before TX19 will be processed.

3. Who should apply and signature requirements

The CRA treats the Legal representative as the person responsible for dealing with the taxpayer's affairs. For estates that's usually the executor named in a will, or the court appointed administrator if there's no will. For trusts the trustee may apply. And for corporations an officer, a director or an authorized representative can submit the request.

The TX19 form must be signed by all legal representatives who are asking for the clearance certificate. The CRA requires documentation proving that the signer or signers are authorized to act. If someone other than the legal representative will act for them, the CRA requires a completed AUT-01, Authorize a Representative for Offline Access.

Worked example: two co-executors who will both administer an estate must both sign TX19 and provide the documents that prove their appointment, such as probate or Letters of Administration, depending on whether a will exists.

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4. Documents to assemble for the TX19 request

The principal form to submit is TX19, Asking for a Clearance Certificate. The TX19 instructions set out mandatory supporting documents for both T1 deceased and T3 trust requests. Required documentation includes a complete and signed copy of the will and any codicils and probate documents if applicable. If the taxpayer died intestate, include the court document appointing an administrator, such as Letters of Administration or Letters of Verification. For trusts, include the trust agreement or other trust documentation.

The CRA requires a detailed inventory of assets at the date of death or at the date of distribution. That inventory must show jointly held property and registered plans such as RRSPs and RRIFs. For each asset provide the adjusted cost base and the fair market value at the date of distribution. You must include a detailed statement of distributions already made and a statement of proposed distribution for any holdback or residual amounts. When property other than cash is involved, provide the names, addresses and social insurance numbers or account numbers for beneficiaries. The TX19 guidance warns that if required documents aren't provided, the request won't be processed.

Worked example: include valuations and adjusted cost base for a cottage and for publicly traded shares, list RRSP and RRIF account numbers, and provide beneficiary SINs for in kind transfers so the CRA can match distributions to tax records.

5. Completing, filing and format rules for TX19

The TX19 instructions emphasize several procedural points: don't attach the TX19 form to a tax return; if you have already uploaded required documents electronically to the CRA, include the CRA reference or confirmation number and the date submitted so the CRA can locate those files. The form must be completed and signed by all legal representatives listed. This CRA provides TX19 as a fillable PDF that must be opened in Acrobat Reader 10 or higher. If you can't use the fillable PDF, the CRA offers a printable version or alternate formats on request. Follow the specific mailing and delivery instructions on the TX19 page and on the Canada.ca clearance certificate page rather than attaching the form to returns.

Expect the CRA to request additional information if its initial review finds gaps. Retain copies of everything you submit, and note the dates you sent documents or uploaded them. Where documents were uploaded previously, include the CRA reference numbers and dates so processing can use the existing files.

Worked example: when TX19 lists an uploaded probate document, provide the CRA upload confirmation number and the upload date on the form so the CRA reviewer can retrieve the file rather than asking you to resubmit the same material.

6. Special cases, limits and practical protections

The CRA generally won't issue a clearance certificate if the estate doesn't have enough assets to cover outstanding tax liabilities. That's a practical limit that often forces executors to consider either retaining assets or establishing security arrangements before distribution. Obtaining a clearance certificate doesn't prevent the CRA from issuing subsequent reassessments that could change tax owing, but the certificate confirms the amounts owing at the time it's issued or confirms that security has been accepted for payment.

Because the CRA may still reassess returns after issuing a certificate, consider whether enough funds or a prudent holdback remain in the estate to cover any future reassessment exposure before distributing all assets. Retain copies of all correspondence and consider confirming with financial institutions or lawyers whether they will accept a comfort letter when full distribution isn't yet planned.

The Canada.ca guidance and the TX19 form are consistent on the core rules: wait for notices of assessment or reassessment before applying, pay or provide security for all outstanding amounts including CPP and EI where applicable, and supply the detailed documentation listed on the TX19 instructions. A private tax-advice site also notes departure from Canada as a common trigger for final tax matters, but the official Canada.ca TX19 and clearance certificate pages focus explicitly on estates, trusts, corporations and GST/HST registrants. If you are leaving Canada permanently, confirm with the CRA whether your situation requires a TX19 or other departure clearance procedures.

Worked example: a trustee closing a trust that holds rental property should ensure HST or GST obligations tied to the property are settled or secured, and should confirm whether the proposed distribution triggers TX19 or another closing filing requirement.

Practical checklist and what to do now

First, download and complete form TX19. If someone else will act for you, complete AUT-01 to authorize a representative. Gather the will or Letters of Administration, probate documents or trust agreement, and prepare a detailed asset list with adjusted cost base and fair market values for each asset. Prepare statements of distributions already made and proposed distributions, and assemble beneficiary names and SINs or account numbers for transfers of non-cash property.

Second, don't apply for clearance until all required returns are filed and notices of assessment or reassessment have been received. Pay or provide security for income taxes, Part IX of the Excise Tax Act amounts, and any CPP and EI amounts that are owed.

Third, complete TX19 using the fillable PDF if possible and include CRA upload reference numbers and dates for any documents you previously supplied electronically. Sign the form as all legal representatives required to sign. Follow the delivery instructions on the TX19 and Canada.ca clearance certificate pages rather than attaching the TX19 to a return.

Fourth, retain copies of everything and expect the CRA to request additional information. Consider whether a holdback is required to protect against later reassessment. If the CRA accepts security for payment instead of immediate payment, ensure the security arrangement is documented so the certificate will reflect it.

In short: First, confirm that the situation fits the canonical reasons for a TX19 request: estate distribution, trust distribution or corporate wind-up. Second, wait for all assessments and pay or secure all amounts including CPP and EI.

Third, complete and sign TX19 and AUT-01 if needed, assemble wills, probate, trust documents and a full asset schedule with adjusted cost base and fair market values, and include CRA upload references. Fourth, follow the Canada.ca delivery instructions, keep copies and consider a holdback for later reassessments.

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Download and complete TX19, assemble the supporting documents, wait for assessment notices, then submit through the Canada.ca clearance certificate page.

This article was created with AI assistance.