Words and Phrases - "security acceptable to the Minister"

The tax payable by a deceased individual respecting certain income and gains under s. 70(2), 70(5) or 70(5.2)) may, pursuant to s. 159(5), be paid in 10 annual installments if the taxpayer’s legal representative so elects and furnishes the Minister with security “acceptable to the Minister.” What is acceptable security, and what is the recommended process?

CRA indicated that the process is initiated with form T2075, which should be filed on its own at the Tax Services Office in the area where the deceased taxpayer resided prior to death, and another copy of the form should be filed with the deceased taxpayer’s relevant tax return. The collections officer will contact the legal representative to discuss, after receipt of the form.

As stated in IC98-1R8, security that may be accepted includes bank letters of guarantee, or standby letters of credit provided by Sched. I or II financial institutions. The Circular also includes mortgages and other forms of security whose acceptability is determined on a case by case basis. It also notes that acceptable security must be liquid, equivalent or near-equivalent to cash and realizable on demand without defences or claims from third parties.

The information and guidelines provided in the Information Circular are not meant to be exhaustive. Legal representatives will have the opportunity to discuss arrangements or security as part of the process for the election.