Understanding Estate Administration Taxes

Estate administration taxes are charged on the total value of the deceased’s estate.

Estate administration taxes, formerly known as probate fees, is charged on the total value of the deceased’s estate. The total value of the estate is the value of all assets owned by the deceased at the time of death, including:

• real estate in Ontario (less encumbrances)
• bank accounts
• investments (e.g., stocks, bonds, trust units, options)
• vehicles and vessels (e.g., cars, trucks, boats, ATVs, motorcycles)
• all property of the deceased which was held in another person’s name
• all other property, wherever situated, including:
  • goods
  • intangible property
  • business interests, and
  • insurance, if proceeds pass through the estate, e.g., no named beneficiary other than ‘Estate’.

If the court issued a Certificate of Appointment of Estate Trustee with a Will Limited to the Assets Referred to in the Will, only those assets included in such will, are to be included.

If the court issued:

• a Confirmation by Resealing of Appointment of Estate Trustee
• a Certificate of Ancillary Appointment of an Estate Trustee with a Will, or
• a Certificate of Appointment of Foreign Estate Trustee’s Nominee as Estate Trustee without a Will,

only those assets located in Ontario are to be included.

Encumbrances against any assets other than real estate cannot be deducted from the value of the assets.

Assets that the deceased had before death but not at the time of death, such as insurance payable to a named beneficiary, assets where there is joint ownership with right of survivorship and real estate outside of Ontario are not included in the value of the estate.

Who pays estate administration tax?

The tax is imposed on the estate of the deceased person.

The tax is paid as a deposit when the estate representative applies for a Certificate of Appointment of Estate Trustee with the Superior Court of Justice.

Cheques for paying the estate administration tax are made payable to the Minister of Finance.

Tax Rates

The current tax rates are found in the Estate Administration Tax Act and are as follows:

• $5 for each $1,000, or part thereof, of the first $50,000 of the value of the estate and
• $15 for each $1,000, or part thereof, of the value of the estate exceeding $50,000.

Note: There is no estate administration tax payable if the value of the estate is $1,000 or less.
The estate administration tax is calculated on the total value of the estate.

For example, for an estate valued at $240,000 the tax would be calculated as follows:

• $5 per thousand for the first $50,000 of the estate
• $50,000 ÷ $1,000 = $50
• $50 X $5 = $250

Plus

• $15 per thousand for the remaining $190,000 of the estate
• $240,000 – $50,000 = $190,000
• $190,000 ÷ $1,000 = $190
• $190 X $15 = $2,850

For a total of $3,100 ($250 + $2,850) payable to the Minister of Finance.

Filing an Estate Information Return

An Estate Information Return must be received by the Ministry of Finance within 90 calendar days after a Certificate of Appointment of Estate Trustee has been issued. However, this does not apply to anyone who applied for a Certificate of Appointment of Estate Trustee prior to January 1, 2015.

How to File an Estate Information Return

You can file the Estate Information Return online. You’ll receive immediate email confirmation of your submission, and the opportunity to save a copy of your return.

Alternatively, you can print and submit the return by mail or fax or in person or by courier.

Subsequently-Discovered Property

An estate representative must file a statement disclosing the subsequently discovered property with the court within six months of the discovery, and file an amended Estate Information Return with the Ministry of Finance within 30 calendar days after the statement is delivered to the court.

It is important if administering an estate to contact a lawyer and accountant to ensure that all the legal and financial requirements are completed properly and by the required timelines, as necessary.