Canada: Goods And Services Tax/Harmonized Sales Tax (GST/HST) And Death

Last Updated: February 13 2017
Article by Frédéric Pansieri, BBA, CPA, CA

The death of an individual that operates a business as a sole proprietor may have GST/HST implications; mostly for the deceased's estate (the "Estate") and its trustees. In this article, we will provide a brief overview of some of the GST/HST rules to consider following the death of a GST/HST registered sole proprietor.

Death of a GST/HST registered individual

When a GST/HST registered sole proprietor dies, his Estate will be deemed to continue the business as if the individual had not died, with the following exceptions:

  • A last GST/HST return for the individual will have to be filed for the reporting period that ends on the date of death.1 The Canada Revenue Agency (the "CRA") must be notified of the individual's death prior to the due date for the final return. The CRA will close the account effective the date of death. If the CRA is not properly notified it may reject a GST/HST return filed for the reporting period ending on the date of death.
  • The Estate's first reporting period will begin on the day after the date of death and end on the day the individual's regular reporting period would have ended if the individual had not died. For example, assume an individual files annually for each calendar year. If the individual dies on September 12th the Estate's first GST/HST return will cover the period September 13 to December 31st. The Estate is considered to be a person separate and distinct from the deceased individual for GST/HST purposes. If the Estate does not generate any GST/HST taxable revenue after the individual dies, the Estate may not be required to register and file any GST/HST returns. However, even in such a case, the Estate may want to register for GST/HST purposes to claim input tax credits ("ITCs") relating to the costs of winding down or selling the deceased's business.

The Estate will need to provide any existing clients of the business with the Estate's newly assigned GST/HST account number. Any GST/HST registered client will need the Estate's GST/HST number so that the client can claim ITCs.

The section entitled "Responsibilities of the Estate" below provides additional information that may be relevant to the trustee for GST/HST purposes. Special rules, not addressed in this article, also apply to the estate of a bankrupt person.

Transfer of the business assets of the deceased

The Estate may transfer, on a GST/HST free basis, any business property of the deceased individual to a beneficiary of the Estate if all of the following conditions apply to the property:

  • Immediately before death, the property was held by the individual for consumption, use or supply in the course of a business that was carried on immediately before the individual's death. This condition may not be satisfied if, for example, the individual was too sick to continue operating the business until the time of death. CRA's view is not clear on this point but one would hope the CRA would be lenient.
  • The Estate transfers the property, in accordance with the individual's will or the laws relating to the succession of property on death, to another individual who is a beneficiary of the Estate.
  • The beneficiary who acquires the property is a GST/HST registrant at the time of the transfer. A registrant includes a beneficiary who is GST/HST registered or who is required to be registered for GST/HST purposes.
  • The property is received for consumption, use or supply in the course of the commercial activities of the beneficiary. It does not have to be the same business that was carried on by the deceased individual. A commercial activity also does not have to be a business. The property could be, for example, a commercial building or land that is acquired by the beneficiary solely for resale.
  • Finally, the Estate and the beneficiary must jointly elect to have the transfer take please on a GST/HST free basis2. There is no prescribed form for this election and it does not have to be filed with the CRA. This election does not have to be for the transfer of all the Business' properties to a single beneficiary. Separate elections could be made for multiple properties each distributed to different beneficiaries. Although a beneficiary would generally acquire the property from the Estate for free, the purpose of the joint election is to avoid the Estate being required to charge the beneficiary GST/HST calculated on the property's fair market value.

The Estate trustee should also obtain a clearance certificate3 before distributing the Estate's assets. Otherwise, the trustee(s) may be held personally liable for the payment of any GST/HST owing by the Estate to the extent of the value of the assets so distributed.

Responsibilities of the Estate

Each Estate trustee will be liable to satisfy every GST/HST obligation imposed on the Estate, whether the obligation was imposed before or during the period during which the trustee acts as Estate trustee (including the period before the individual's death). The satisfaction of an Estate obligation by any of the trustees will discharge the liability of all other trustees to satisfy that obligation.

Each trustee will be jointly and severally liable with the Estate and each of the other trustees, if any, for the payment of all GST/HST that become payable or remittable by the Estate before or during the period during which the trustee acts as an Estate trustee, with the following exceptions:

  • A trustee is liable for the payment or remittance of amounts that became payable or remittable before becoming a trustee only to the extent of the property or money of the Estate under the control of the trustee; and
  • The payment or remittance by the estate or the trustee of an amount in respect of the liability discharges the joint liability to the extent of that amount.


A trustee should be aware of the potential GST/HST implications before he/she agrees to act as an Estate trustee. It is also important for any beneficiary to register for GST/HST purposes in a timely manner (i.e., before the time the deceased's business assets are distributed to the beneficiary) to minimize any potential negative implications.


1. The CRA has the discretion to waive the requirement for the trustee to file a GST/HST return for any reporting period of the individual ending on or before the day the individual died.

2. Under subsection 167(2) of the Excise Tax Act.

3. A clearance certificate is a certificate by which the CRA confirms no debt relating to GST/HST are owing by the Estate. The Estate's trustee is required to file Form GST352 to apply for the certificate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Frédéric Pansieri, BBA, CPA, CA
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.