Power of Attorney and Taxes in New Brunswick

The Tax Side Nobody Warns You About

When you accept the role of attorney for property under a New Brunswick enduring power of attorney, you're not just managing bank accounts. You're stepping into your parent's entire financial life — and that includes their tax obligations. Miss a filing or underreport income, and you may expose the grantor or estate to penalties, interest, or delays. Failing to authorize yourself can delay access; personal liability depends on your legal role and what you do with the assets.

Authorizing Yourself with the CRA

The CRA doesn't automatically know that you're now managing someone else's finances. Before you can file returns, request reassessments, or discuss your parent's tax account, you need to register as an authorized representative:

Option 1: CRA My Account (online). If your parent still has capacity to use their CRA My Account, they can authorize you as a representative under "Authorize my representative." You'll need your RepID, GroupID, or business number, as applicable.

Option 2: Form AUT-01. If your parent can't use the online system, complete CRA Form AUT-01 (Authorize a Representative for Offline Access) and send it to the CRA tax centre. For online access as a legal representative, register through Represent a Client and submit the legal documents requested by the CRA.

Option 3: Contact the CRA with the EPA. In urgent situations, contact the CRA and follow its legal-representative process, with a copy of the EPA ready to provide. Expect delays.

Until your authorization is processed, the CRA will refuse to discuss your parent's tax situation with you. Start this process the moment the EPA activates — don't wait until filing season.

Filing Tax Returns as Attorney for Property

Once authorized, you can help ensure your parent's tax returns are filed on time and accurately. In practice, this means:

Income reporting. You'll need to track all sources of income flowing into your parent's accounts: CPP, OAS, GIS, private pensions, RRSP/RRIF withdrawals, investment income (interest, dividends, capital gains), rental income, and any employment or self-employment income that continues. This isn't just a tax obligation — Regulation 2020-43 requires you to maintain an income sources log as part of your record-keeping duties.

Deductions and credits. An incapacitated parent may qualify for the Disability Tax Credit (DTC) if a medical practitioner completes Form T2201. The parent may also be eligible for medical expense credits and the age amount, while the person supporting them may qualify for the Canada caregiver credit if the statutory conditions are met. Missing these credits means paying more tax than necessary from the parent's estate.

Provincial tax. New Brunswick income tax is calculated on the federal return using the provincial rates. For 2026, the rates are 9.40% on the first $52,333, 14% on the next portion up to $104,666, 16% up to $193,861, and 19.50% above that. The parent's bracket depends on their taxable income — which can shift significantly if you liquidate investments or sell real property to fund care.

Tax Consequences of Major Financial Decisions

As attorney for property, several common actions trigger tax events that you need to anticipate:

Selling the family home. If the home was the parent's principal residence, the sale is generally exempt from capital gains tax under the principal residence exemption. But if the parent moved into a nursing home two years ago and the house has been sitting empty or rented, the CRA may challenge the exemption. You'll need to designate the property on Form T2091(IND) with the parent's return.

RRSP/RRIF withdrawals. Withdrawing from a parent's registered accounts to fund care generally triggers income tax. For lump-sum amounts, the financial institution usually withholds tax at source (10% to 30% depending on the amount), but the actual tax rate depends on the parent's total income for the year; RRIF minimum amounts have different withholding rules. Large withdrawals can push the parent into a higher bracket and claw back OAS through the OAS recovery tax.

Selling investments. For 2026, the general capital-gains inclusion rate is 50%. The proposed 66.67% rate on an individual's gains above $250,000 was not proceeded with. If you're liquidating a diversified portfolio to pay for care, the tax bill can be substantial.

Rental income. If you're renting out the family home while it's on the market or while the parent is in care, that rental income must be reported. Deductible expenses include property taxes, insurance, maintenance, and a portion of mortgage interest.

When the POA Ends at Death

All enduring powers of attorney terminate the instant the grantor dies. At that point, tax responsibility shifts from the attorney to the executor or estate administrator.

But there's often a messy overlap. If the parent dies mid-year, someone needs to file a final return covering income from January 1 to the date of death. If you were the attorney and you're also the executor, that's a continuous obligation. If the executor is a different person, you'll need to hand over your financial records — every transaction log, every bank statement, every receipt — so they can complete the final return accurately.

The estate itself may also owe probate tax under New Brunswick's 2026 tiered structure. For estates over $100,000, the rate is $15 per $1,000 (or part thereof) above the threshold. This is a provincial tax separate from income tax, paid at the time of filing for Letters Probate.

Avoiding Personal Liability

The CRA can hold an estate's legal representative personally liable for unpaid taxes if estate assets are distributed before obtaining a clearance certificate. Form TX19 is the request for that certificate, not the certificate itself. This risk applies primarily to executors and administrators after death; an attorney for property acts before death under the EPA and should keep meticulous records of payments made for the grantor's benefit.

Best practice: keep meticulous records of every payment and its purpose. If the CRA ever questions a transaction, you want to be able to demonstrate that every dollar was spent for the grantor's benefit, in accordance with the EPA's terms.

The New Brunswick Power of Attorney Kit includes a financial record-keeping system designed around the dual requirements of Regulation 2020-43 and CRA compliance, with an income sources tracker, transaction ledger, and a checklist for the CRA authorization process.

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