Section 267.1

Subsection 267.1(2)

Administrative Policy

28 February 2019 CBA Roundtable, Q.32

s. 267.1(2) liability is not extinguished by s. 270 clearance certificate

After noting that:

  • s. 267.1(2) generally creates personal liability of a trustee (including the executor of an estate) for the GST/HST obligations resulting from the trustee’s acting as a trustee of the trust (or estate)
  • s. 270 provides that a representative such as an executor should not distribute property under the representative's control before obtaining a clearance certificate certifying that all amounts, that are, or can reasonably be expected to become, payable or remittable under Part IX in respect of the reporting period during which the distribution is made, or any previous reporting period, have been paid (or acceptable security therefor provided)
  • failure to obtain the certificate renders the representative personally liable for the payment or remittance of those amounts to the extent of the value of the property or money distributed.

CRA stated:

That being said, the fact that a clearance certificate is issued to a representative of an estate, does not free the estate from any outstanding obligations under Part IX and as such, the trustee would still be liable to satisfy these obligations pursuant to subsection 267.1(2).

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 270 - Subsection 270(4) obtaining a clearance certificate does not relieve an executor of personal liability for estate GST/HST obligations 459

Subsection 267.1(5)

Paragraph 267.1(5)(a)


British Columbia Investment Management Corp. v. Canada (A. G.), 2018 BCCA 47, aff'd 2019 SCC 63

services of trustees of managing assets held in trust would not be supply in absence of s. 267.1(5)(a)

bcIMC was a BC Crown agent which was formed to manage and hold investments for the provincial pension plans. The governing Act created a statutory trust under which each pension plan only has an entitlement to units in the investment pools managed by bcIMC and does not have ownership in any investment pool assets. Willcock JA noted (at para 109) that “there is no clear beneficial interest in the pooled funds that is distinct from bcIMC’s legal interest.”

Before concluding that (but for an intergovernmental agreement under which the Province agreed that it and its agents would be liable for GST), s. 267.1(5)(a) had the effect of imposing federal tax on bcIMC contrary to s. 125 of the Constitution Act, 1867, Willcock JA found (at para. 113) that s. 267.1(5)(a) effected “a change in the identity of the recipient of the services from the trustee, here the exempt Province, to the trust, a third party” and thereby “had the effect of separating the Crown from its assets.”

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 125 imposition of GST on investment assets held by a provincial Crown agent would have been prohibited by its governmental immunity but for the reciprocal taxation agreement 483
Tax Topics - Excise Tax Act - Section 122 deeming services provided by B.C. Crown agent in managing assets held in trust trenched on B.C. crown immunity 237
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) arrangement under which the beneficiaries only had rights to units and no ownership of underlying assets was treated as a trust 164
Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Act - Section 19 enforcement of a reciprocal taxation agreement was possible pursuant to the Federal Courts Act 232