Estate Administration Tax in Ontario

Estate Administration Tax is a provincial tax that may be payable when an application is made for an Ontario estate certificate, commonly referred to as probate.

The amount of tax depends on the value of the estate for probate purposes. Determining the appropriate estate value can require consideration of the deceased's assets, how they were owned, and the rules governing what must be included in the probate application.

Nobari Law Professional Corporation assists estate trustees with Ontario probate applications and related estate administration matters.

Estate Administration Tax generally applies when an application for an estate certificate is required. The applicable amount is generally paid when the probate application is submitted to the Court.

The tax is calculated based on the value of the deceased’s estate as of the date of death, based on the assets required to be included for estate certificate purposes and the applicable Estate Administration Tax rules.

Not every asset associated with a deceased person is necessarily included in the value used to calculate Estate Administration Tax. Ownership, beneficiary designations, the nature and location of an asset, and other circumstances may affect the probate application.

For estate certificate applications made on or after January 1, 2020:

Estate value of $50,000 or less

No Estate Administration Tax is payable.

Estate value over $50,000

There is no tax on the first $50,000.

Estate Administration Tax is then calculated at:

$15 for every $1,000, or part of $1,000, of estate value above $50,000.

If the value of the estate for probate purposes is $240,000:

Estate value above $50,000: $190,000

$190,000 ÷ $1,000 = 190

190 × $15 = $2,850

The Estate Administration Tax would therefore be $2,850.

The applicable tax should be calculated based on the circumstances of the particular estate.

Determining the value of an estate for probate purposes is not always the same as simply adding together everything the deceased owned or had an interest in.

Depending on the circumstances, assets included for estate certificate purposes may include:

• Ontario real estate owned by the deceased;
• bank and cash accounts;
• non-registered investments;
• certain business or corporate interests;
• vehicles and valuable personal property; and
• other assets forming part of the estate.

The treatment of an asset can depend on how it was owned and whether it passes through the estate.

For example, an asset held jointly with another person or an asset with a valid beneficiary designation may require separate consideration when determining whether it forms part of the estate for probate purposes.

Estate Administration Tax is not generally calculated by simply subtracting all of the deceased's debts from the value of the estate.

Different rules apply to the valuation of estate assets and permitted deductions.

For example, certain encumbrances against Ontario real property may affect the value attributed to that property for Estate Administration Tax purposes, while ordinary estate debts and liabilities do not necessarily reduce the value of the estate used to calculate the tax.

The applicable valuation rules should therefore be considered before the estate value is reported in a probate application.

The applicable Estate Administration Tax is generally paid when the probate application is submitted to the Court.

Once the estate certificate is issued, the amount paid on the application becomes the Estate Administration Tax payable by the estate.

The estate trustee should maintain records supporting the values reported in the probate application.

After an estate certificate is issued, an Estate Information Return may also need to be filed with the Ontario Ministry of Finance.

The Estate Information Return provides information about the estate and the values used in determining the Estate Administration Tax.

The Return is generally required even where the estate is valued at $50,000 or less and no Estate Administration Tax is payable, subject to the applicable exceptions.

The Estate Information Return must be filed within the applicable deadline after the estate certificate is issued.

Estate trustees should ensure that the information provided to the Court and the Ministry of Finance is accurate and supported by appropriate records.

Sometimes additional property is discovered or information becomes available after the estate certificate has been issued.

Changes to the reported estate value may create additional reporting or Estate Administration Tax obligations.

Estate trustees should keep appropriate records of estate assets and values and determine whether any further reporting, tax payment, or court filing is required if relevant information changes after the Certificate is issued.

No.

Estate Administration Tax is an Ontario provincial tax associated with obtaining an estate certificate. It is separate from income tax obligations that may arise following a person's death.

The deceased and the estate may have separate income tax filing and payment obligations administered through the Canada Revenue Agency.

Nobari Law Professional Corporation does not provide accounting or tax advice. Estate trustees should obtain advice from an accountant or other qualified tax professional regarding income tax matters where appropriate.

Not necessarily.

Having a valid Will does not automatically mean that probate will be unnecessary or that Estate Administration Tax will not be payable.

Whether probate is required depends largely on the assets forming part of the estate and whether financial institutions, land registry requirements, purchasers, or other third parties require formal confirmation of the estate trustee's authority.

Learn more about Probate With a Will in Ontario.

Estate Administration Tax may also be payable where a person dies without a Will and an application is made for a Certificate of Appointment of Estate Trustee without a Will.

The absence of a Will does not itself determine the amount of Estate Administration Tax. The tax is based on the estate value to which the applicable probate rules apply.

Learn more about Probate Without a Will in Ontario.

Nobari Law Professional Corporation can assist estate trustees with legal matters arising in connection with probate and estate administration, including:

• determining what information is required for an Ontario probate application;
• reviewing estate assets and ownership information for the probate application;
• preparing and filing probate documents;
• assisting with required probate documentation after additional assets are identified; and
• providing legal assistance during the administration of the estate, where requested.

Accounting and income tax advice should be obtained from an accountant or other qualified tax professional where appropriate.

Estate trustees can use our Probate Information Checklist to begin gathering commonly requested estate information and documents.

You do not need to have every document before contacting Nobari Law Professional Corporation.

Every estate is different. The Estate Administration Tax payable, if any, depends on the value and circumstances of the particular estate.

Contact Nobari Law Professional Corporation to discuss an Ontario probate application and learn how we may assist with probate or estate administration.