- If the value declared was too low, additional estate administration tax can be paid to the court or to the Ministry of Finance.
- A deposit can be reclaimed from the Superior Court only before the certificate is issued; after that, overpaid tax is requested from the Ministry of Finance.
- The Ministry can generally reassess within four years of the due date, but at any time if the return was not filed on time or contained a misrepresentation.
- Incorrect or incomplete information in an Estate Information Return must be amended within 60 days of becoming aware.
Estate trustees sometimes discover, after the probate application is filed, that the estate value they declared was wrong. A forgotten account, a house valued too high, or a debt wrongly subtracted can all change the figure and therefore the tax.
This article explains how estate administration tax is calculated, how to correct an error in either direction, and what audit risk and penalties look like. The right steps depend on your facts, so a lawyer or accountant should confirm them for your estate.
How the tax is calculated, and where errors come from
For applications on or after January 1, 2020, there is no tax on an estate valued at $50,000 or less. Above that, the tax is $15 per $1,000, or part of $1,000, of the total estate value. The value is rounded up to the nearest $1,000. For example, a $239,250 estate is taxed as $240,000, so the tax is $2,850.
Most mistakes come from what is counted and what is not. Some common ones are in the table below.
| Item | Treatment for estate value |
|---|---|
| Funeral expenses, legal fees, credit card debt, lines of credit, vehicle debt, loans and interest, real estate commissions | Not deductible |
| Mortgages and liens on real property | Can be deducted from the property value |
| Jointly owned assets passing to the survivor | Excluded |
| RRSPs, RRIFs, TFSAs and RPPs with a named beneficiary | Excluded |
| Real estate outside Ontario | Excluded |
| Ancillary (resealed) certificate | Only Ontario assets counted |
A trustee who deducted debts that are not allowed may have underpaid. A trustee who included assets that pass outside the estate may have overpaid.
If you underpaid: paying additional tax
If the estate value declared was too low, additional tax can be paid in one of two ways. You can pay it to the court, with an affidavit of the revised value and an explanation. Or you can pay it to the Ministry of Finance, which gives a confirmation you hand to the court.
Payment to the court or Ministry does not replace the return. If the Estate Information Return contained incorrect or incomplete information, it must be amended within 60 days of becoming aware, and no later than four years after the certificate was issued. Newly found assets are reported at date-of-death fair market value, with an amendment within 60 days after the statement is delivered to the court.
The tax is paid by the estate, not by the trustee personally.
If you overpaid: getting money back
The route depends on timing. Before the certificate is issued, a deposit can be reclaimed from the Superior Court. If no certificate is issued, no tax is owed and the deposit is refunded.
After the certificate is issued, you do not go to a courthouse. Overpaid tax is requested from the Ministry of Finance by filing or amending the Estate Information Return. An EIR must have been filed within four years of issuance, and the request must be received within 12 years of issuance or within 2 years of the Notice of Assessment date.
- Before the certificate: ask the Superior Court
- After the certificate: ask the Ministry of Finance through the EIR
- Keep records showing why the original value was too high
Audit risk, reassessment and penalties
The Ministry of Finance may assess or reassess the tax within four years after it was due, which is the day the certificate is issued. It may do so at any time if the EIR was not filed by the deadline, or if there was a misrepresentation through neglect, carelessness, wilful default or fraud. The EIR is due within 180 calendar days of issuance, even where no tax is payable.
Failing to file an EIR or making false or misleading statements can lead to a fine of at least $1,000 and up to twice the tax payable, imprisonment of up to two years, or both.
Supporting records must be kept for four years at the estate representative's principal place of business or residence. If you receive a Notice of Assessment and disagree, a Notice of Objection must be filed within 180 days of its date, online at ontario.ca/taxappeals.
Correcting a mistake promptly and in the way the rules set out is generally a better position than waiting to be found. Whether a particular error is treated as a simple mistake or something more serious depends on the facts, and a lawyer can confirm.
What to do next
- List every asset and debt and compare it with the value you declared
- Check each item against what counts and what is excluded
- Work out the corrected value, rounded up to the nearest $1,000, and the tax difference
- Note the certificate issue date, because it drives every deadline
- Decide whether you owe more tax or are owed a refund, and use the matching route
- Amend the Estate Information Return within 60 days of becoming aware of the error
- If you receive a Notice of Assessment, diary the 180-day objection deadline
- Get advice from a lawyer or accountant before filing if the error is large or the facts are unclear
Frequently asked questions
Can I fix the estate value after the certificate has been issued?
Yes. If the value was too low, additional tax can be paid to the court or to the Ministry of Finance. Incorrect information in the Estate Information Return is amended within 60 days of becoming aware, and no later than four years after the certificate was issued.
How long can the Ministry audit an estate?
Generally within four years after the tax was due. If the return was not filed on time, or there was a misrepresentation through neglect, carelessness, wilful default or fraud, there is no time limit.
Where do I ask for a refund of overpaid tax?
Before the certificate is issued, from the Superior Court. After issuance, from the Ministry of Finance by filing or amending the Estate Information Return.
Are funeral costs and legal fees deducted from the estate value?
No. Funeral expenses, lawyer fees, credit card debt, loans and lines of credit are not deductible for this purpose. Mortgages and liens can be deducted from the value of real property.
Sources
- Ontario.ca – Estate Administration Tax — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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