Estate Administration Tax in Ontario: What the Executor Pays and When

Estate Administration Tax is often called probate tax. If you are the executor, it is one of the first costs you will face when you apply for a court certificate.

This article explains how the tax is calculated, how it differs from income tax owed by the deceased or the estate, and what to do after the certificate is issued.

How the tax is calculated

For applications made on or after January 1, 2020, no Estate Administration Tax is payable if the estate is $50,000 or less. Above that, the tax is $15 for each $1,000 (or part) over $50,000.

The phrase "or part" matters: a partial thousand is treated like a full one.

What counts as the value of the estate

The value is based on the deceased's assets at death. When you file the Estate Information Return, you report the value of the deceased's assets at death.

Whether a particular asset is included, such as jointly held property, assets with a named beneficiary, or property outside Ontario, depends on the facts. A lawyer can confirm what belongs in the figure before you sign anything under oath.

When it is paid and what you file

For applications made on or after January 1, 2020, no Estate Administration Tax is payable if the estate is $50,000 or less. Above that, the tax is $15 for each $1,000 (or part) over $50,000. Confirm the exact payment steps and method with the court office handling your application, since details can vary.

After you receive the certificate, the estate trustee must file an Estate Information Return within 180 calendar days, showing the value of the deceased's assets at death.

• Gather a list of assets and their values at the date of death.
• Confirm with the court office what tax, if any, applies to your application.
• Diarize the 180-day deadline for the Estate Information Return from the day you receive the certificate.

Bonds and the wider job of an estate trustee

The tax is only one part of the role. Estate trustee duties include finding the will, winding up the deceased's affairs, paying taxes, bills and other debts, and distributing what remains to those entitled.

Some applications also involve a bond, which is a form of security for the estate. For a named executor, a bond is needed only when the applicant does not live in Ontario, another province or territory, or a Commonwealth country. A person who lives outside Ontario and outside the Commonwealth must give the same security an administrator would, unless a judge dispenses with or reduces it in special circumstances.

Every person granted administration, including administration with the will annexed, must give a bond with any sureties the judge requires. The bond is for double the sworn value of the estate, and the judge may at any time, in special circumstances, reduce or dispense with it.

There are exceptions. No bond is required for a small estate unless a beneficiary is a minor or incapable, but this is subject to section 6 of the Estates Act, so a non-Commonwealth non-resident executor may still need security. No bond is required where administration on an intestacy goes to the surviving spouse, the net estate does not exceed the preferential share, and an affidavit of the estate's debts is filed. Whether a bond applies to you depends on your situation, so it is worth confirming with a lawyer.

Do not confuse it with income tax

Estate Administration Tax is separate from income tax. The legal representative must make sure the deceased's tax returns are filed and any balance owing is paid before distributing the estate, and should apply for a clearance certificate, as needed, before distributing any assets.

The final income tax return has its own deadline. If death occurred between January 1 and October 31, the return is due April 30 of the following year. If death occurred between November 1 and December 31, it is due 6 months after the death. If the deceased or their spouse or common-law partner carried on a business, the return is due June 15 of the following year (death January 1 to December 15) or 6 months after death (December 16 to 31), and any balance owing is still due on the regular payment date.

The estate may also have its own T3 return, which must be filed, with any balance paid, no later than 90 days after the trust's tax year-end. An estate can be a graduated rate estate for up to 36 months after death. If it winds up earlier, its tax year ends on the date of final distribution, and the final T3 is due within 90 days after that.

A clearance certificate, requested on Form TX19, confirms that all income tax, GST/HST, interest and penalties owed have been paid. It should be requested only after the required returns are filed and assessed. A representative who distributes property without one is personally liable for unpaid tax, up to the value of the assets distributed.

What to do next

• List all assets and their values at the date of death.
• Ask a lawyer how to treat joint assets and assets with beneficiary designations.
• Confirm with the court office how and when to pay the tax with your application.
• Ask whether a bond applies to your situation.
• Calendar the Estate Information Return deadline.
• Plan for the deceased's final income tax return and a clearance certificate before distributing anything.

Frequently asked questions