Is Estate Administration Tax Owing on Bank Accounts in Ontario?

You are dealing with an estate in Ontario and the deceased had bank accounts, GICs, stocks or mutual funds. You want to know which of them are used to work out Estate Administration Tax, and what value to use.

The answer depends on how each asset was held and who is named to receive it. This article walks through the general rules so you can sort the accounts into those that count and those that do not.

When the tax applies at all

Estate Administration Tax is charged only when an estate certificate (probate) is applied for and issued. If no certificate is applied for or issued, no tax is owed. The tax is paid by the estate, not personally by the estate representative.

For certificates applied for on or after January 1, 2020, no tax is payable on an estate worth $50,000 or less. Above $50,000, the tax is $15 for every $1,000 (or part thereof) of the value over $50,000. The value is rounded up to the nearest thousand dollars.

What counts toward the estate's value

The estate's value includes bank accounts, including those at foreign banks, as well as investments, vehicles and vessels wherever located, property held in another person's name, business interests and other property wherever situated.

• Chequing and savings accounts, in Canada or abroad
• Investments such as stocks and GICs held in the deceased's own name
• RRSPs, RRIFs and TFSAs where the estate is the beneficiary
• Insurance, if the proceeds are payable to the estate

What is left out

Assets the deceased no longer owned at death are left out, such as insurance paid to a named beneficiary. Jointly owned assets that pass automatically to the surviving owner or owners are also left out.

RPPs, RRSPs, RRIFs and TFSAs that have a beneficiary designation or declaration are left out too. By contrast, when the estate itself is named as beneficiary of an RRSP, RRIF or TFSA, it is included.

Joint ownership can differ by type. When a joint tenant dies, the surviving co-owners inherit the share. A tenant in common's share does not pass automatically; it becomes part of the estate and counts if probate is sought. How a particular account is set up is worth confirming with the bank or a lawyer.

How to value accounts and investments

Assets are valued at their fair market value at the time of death. In plain terms, that means what the asset was worth on the date the person died, not what it is worth later when you sell or transfer it.

Estate representatives must be able to back up asset values with supporting documents, such as statements or an appraiser's opinion of value. For complex assets, a professional appraiser with expertise in that area may help recommend a value. The guidance gives only this general rule for items such as private company shares, so those are worth raising with a lawyer or accountant.

Debts do not reduce the value of bank accounts or investments. Only encumbrances on real property can be deducted; funeral expenses, lawyer's fees, loans and interest, vehicle debt and credit card debt do not reduce the estate's value.

What to do next

• List every account and investment and note whether it is in the deceased's name alone, joint, or has a named beneficiary.
• Request date-of-death statements or valuations for each asset.
• Separate assets that pass outside the estate from those that do not.
• Add up the estate's total value and be ready to enter it on Form 74A, which asks for real property, personal property and total estate value.
• File the Estate Information Return within 180 calendar days after the certificate is issued.
• Keep the records supporting the return for four years.

If you find assets after the certificate is issued, an amended return listing the newly discovered property is due within 60 days after the statement of that property is delivered to the court. If you are unsure how an account is held, the bank or a lawyer can help you confirm it. A lawyer or accountant can also confirm how the rules apply to your situation.

Frequently asked questions