APPENDIX A
Checklist Of Filing And Planning Requirements
- File final return for the period from January 1 of the
year of death up to the date of death including all
income accruing up to that time. The final return is to
be filed by the later of April 30 of the year following
the year of death, or 6 months following the date of
death. If the Will creates a spouse trust the return must
be filed within 18 months of the date of death.
- File a separate return for rights or things, as
necessary. Election to be made by the later of 1 year
from the date of death or 90 days after the notice of
assessment of the final return is mailed by Revenue
Canada.
- File a separate return for the fiscal period of a
proprietorship or partnership whose fiscal year ended
prior to the date of death, as applicable. Separate
return must be filed by the later of 6 months after death
and April 30 of the year following death.
- File a separate return for income from a testamentary
trust for which the deceased was a beneficiary, as
applicable. Separate return must be filed by the later of
6 months after death and April 30 of the year following
death.
- File returns for years prior to the year of death where
those returns have not been filed by the deceased during
his lifetime.
- File election and post security for payments of tax on an
installment basis where appropriate.
- Review each capital property of the deceased to determine
whether some or all assets passing to the spouse should
be transferred at fair market value in order to utilize
capital losses (or super capital gains exemption, if
available) of the deceased. Also consider electing to
pass depreciable property to spouse at fair market value
to trigger capital gains to deceased to utilize terminal
losses.
- Consider triggering exempt capital gains to deceased
farmer on transfer of farm property to a child.
- If the terminal losses and allowable capital losses
realized in the first taxation year of the estate are
sufficiently large, file an election to have those losses
applied against income reported on the final return of
the deceased to reduce the tax payable on that return.
The resulting refund is then applied to the tax liability
of the estate or if the trust is not liable for taxes,
the amount will be refunded to the estate.
- File a T3 trust return for each fiscal period of the
estate. The T3 return must be filed within 90 days of the
end of the taxation year of the trust. T3 Supplementary
slips must be issued to each beneficiary to whom income
of the estate is paid or payable in the taxation year of
the trust.
- Ensure that the preferred beneficiary election is filed
no later than 90 days following the end of the taxation
year of the trust.
- Prior to the wind up of the estate and the distribution
of its assets to the beneficiaries, obtain a clearance
certificate from Revenue Canada certifying that all
taxes, interest and penalties of the deceased and his
estate have been paid or that adequate security has been
given to Revenue Canada in respect of any unpaid tax or
other amounts. If this certificate is not obtained, the
personal representative will remain personally liable to
Revenue Canada for any tax which remains outstanding to
the extent of the value of the assets of the estate. The
estate may be distributed prior to receiving the
certificate but the personal representative should
withhold an amount to cover any additional tax which
might be owing up to the time of issuance of the
certificate.