Clearance Certificate

A "Clearance Certificate" is a document issued by the CRA to confirm that a deceased person's estate has paid all taxes, debts, and other liabilities owed to the government. This certificate protects the legal representative (executor or administrator) from personal liability for any outstanding taxes once the estate is distributed. The certificate is usually requested before distributing the estate's assets to beneficiaries to ensure no further tax obligations remain.

Key aspects of a Clearance Certificate include:

1. Estate Settling: Confirms all taxes owed by the deceased or the estate have been paid.
2. Executor Protection: Protects the estate's legal representative from liability for any unpaid taxes.
3. Distribution Requirement: Typically required before the estate can be distributed to beneficiaries.

A Clearance Certificate provides legal assurance that the estate is clear of tax liabilities, allowing for the final distribution of assets.