30 November 1996 Ruling 9715633 - PERSONAL LIABILITY OF EXECUTOR

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

whether executor of estate is personally liable under 159(3) for property of the estate which is turned over to a replacement executor

Position: NO

Reasons:

appointment of replacement executor does not result in a distribution

XXXXXXXXXX							971563
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1997

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling

This is in response to your letter of XXXXXXXXXX wherein you requested an advance income tax ruling on behalf of the above-referenced taxpayers. In your letter of XXXXXXXXXX, you provided additional information in respect of the facts described in your original letter. We also acknowledge the information provided during our various telephone conversations (XXXXXXXXXX).

We understand that to the best of your knowledge and that of XXXXXXXXXX, none of the issues involved in this request is:

(a)involved in an earlier return of the taxpayer or a related person,

(b)being considered by a tax services office or taxation centre in connection with a tax return already filed by the taxpayer or a related person,

(c)under objection, or

(d)is before the courts or, if a judgment has been issued, the time limit for appeal has not expired.

Definitions

In this letter, the following terms have the meanings specified:

Unless otherwise indicated, all references to statute are to the Income Tax Act (Canada), R.S.C. 1985 (5th Supp.), c.1, as amended (the "Act");

"Court" refers to the XXXXXXXXXX Court (General Division);

"Executor" means XXXXXXXXXX;

"Estate A" refers to the Estate of XXXXXXXXXX;

"Estate B" refers to the Estate of XXXXXXXXXX;

"Individual A" refers to XXXXXXXXXX; and

"Individual B" refers to XXXXXXXXXX.

Our understanding of the facts, proposed transactions and purpose of the proposed transactions is as follows:

FACTS

Individual A and Individual B both died on XXXXXXXXXX. On their death, all of their property passed to Estate A and Estate B, respectively. The Executor is the estate trustee of both Estate A and Estate B. Letters Probate of the last will and testament of both Individual A and Individual B were issued to the Executor by the Court on XXXXXXXXXX.

Pursuant to the Letters Probate, the Executor has been administering Estate A and Estate B in accordance with the last will and testament of Individual A and Individual B, respectively. As of the date hereof, the Executor continues to administer both estates.

PROPOSED TRANSACTIONS

The Executor proposes to apply to the Court to be removed as estate trustee of both Estate A and Estate B upon a replacement estate trustee being named in both estates.

PURPOSE OF THE PROPOSED TRANSACTIONS

Due to his failing health, the Executor is no longer able to administer the estates.

RULINGS

Provided that the preceding statements constitute a complete and accurate disclosure of all of the relevant facts, proposed transactions and purpose of the proposed transactions, and provided that the proposed transactions are completed in the manner described above, we confirm that upon the removal of the Executor as estate trustee and a replacement estate trustee being named by the Court, the Executor will not be personally liable, pursuant to subsection 159(3) of the Act, with respect to any property of either Estate A or Estate B, control of which is transferred to the replacement trustee(s).

The above rulings are given subject to the limitations and qualifica-tions set out in Information Circular 70-6R3, dated December 30, 1996, and are binding provided that the proposed transactions are completed by XXXXXXXXXX.

These rulings are based on the Act in its present form and do not take into account any proposed amendments to the Act.

COMMENTS

Nothing in this letter should be construed as confirming that the Department has absolved the Executor of any personal liability pursuant to subsection 159(3) of the Act which may arise as a result of any distribution of property of either Estate A or Estate B which was made prior to the completion of the proposed transactions.

Yours truly,

for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch