How Is Ontario Estate Administration Tax Calculated on an Estate's Value?
Yes, the estate pays Estate Administration Tax when an estate certificate is applied for, and it is charged on the value of the estate. It is paid as a deposit with the application to the Superior Court of Justice, and the estate pays it, not the estate representative.
For certificates applied for on or after January 1, 2020, estates worth $50,000 or less pay no tax, and larger estates pay $15 for each $1,000 or part of $1,000 over $50,000, with the value rounded up to the nearest thousand. Jointly owned assets that pass automatically to the survivor, real estate outside Ontario, and RRSPs, RRIFs or TFSAs with a beneficiary designation are excluded. Mortgages on included Ontario real estate can be deducted, but funeral expenses, lawyer fees, loans and credit card debt cannot.
An Estate Information Return must be filed with Ontario's Ministry of Finance within 180 calendar days after the certificate is issued, even if the estate's value is $0. If an estimate was used, a sworn statement of the total value is due within six months. Details depend on the estate, so a lawyer can confirm them.
Key takeaways
- The estate pays Estate Administration Tax, not the estate representative, as a deposit with the court application that becomes the tax when the certificate is issued.
- For certificates applied for on or after January 1, 2020, there is no tax on estates worth $50,000 or less, and $15 for each $1,000 or part of $1,000 over $50,000.
- Jointly owned assets that pass automatically to the survivor, real estate outside Ontario, CPP death benefits, and RRSPs, RRIFs, RPPs or TFSAs with a beneficiary designation are excluded from the value.
- An Estate Information Return is due within 180 calendar days after the certificate is issued, and an amended return is due within 60 days after the actual value is given to the court if an estimate was used.