After the Office of the Public Trustee for the Province (the “Trustee”) finalized the Estate of the deceased, received a CRA clearance certificate, and closed its file, with the 36-month graduated rate estate (“GRE”) period then expiring, the Trustee was contacted by the Government of Canada Pension Centre that a pension payment was still owing to the deceased, which amount was then paid and received by the Estate on the last day of the Estate’s taxation year, and distributed by the Trustee in the following taxation year.
The Trustee re-opened the Estate and reported the lump sum benefit, which was taxed at the highest marginal tax rate applicable to individuals. Upon filing the T3 return, the Trustee requested that the GRE period be extended to include the year in which the pension amount was received. The Directorate stated:
The GRE definition does not provide the Minister of National Revenue with the ability to extend the 36-month period, nor can the authority for such an extension be found elsewhere in the Act.