Overpaid Estate Administration Tax: How to Get a Refund in Ontario

You filed for a certificate and later realized you overstated the estate's value, perhaps by counting a debt that could not be deducted or an asset at too high a figure. You are wondering whether the extra tax can come back.

Where you ask depends on one thing: whether the certificate has been issued yet. This article walks through both routes and the deadlines.

Why overpayment happens

The tax is paid as a deposit when the application is filed and becomes payable when the certificate is issued. Deposits are sometimes based on estimated values. If the estimate was too high, or an asset was valued above fair market value at the date of death, the estate may have paid too much.

Mistakes also happen when people subtract items the tax rules do not allow, or include property that is left out of the calculation. The next section sets out what generally counts.

How the estate's value is worked out

For applications made on or after January 1, 2020, no tax is payable if the estate is worth $50,000 or less. Above that, the tax is $15 for each $1,000 or part of $1,000 by which the value exceeds $50,000, and the estate value is rounded up to the nearest thousand. For applications made before January 1, 2020, the exemption was $1,000 or less and different rates applied.

• Real estate outside Ontario is not included in the value. Other property worldwide, such as bank accounts, investments, vehicles and business interests, is included.
• Ontario real estate is valued less encumbrances such as a mortgage, collateral mortgage or lien.
• Unsecured debts such as credit card balances, loans, interest and lines of credit cannot be deducted.
• Assets, including private company shares and business interests, are valued at fair market value at the date of death, and you should be able to support each value with documents such as statements or an appraiser's opinion.

Before the certificate is issued

If the certificate has not yet been issued, a refund of the deposit is requested from the Superior Court of Justice office where the application was filed, not from the Ministry. Under the Estate Administration Tax Act, s. 3(6)-(7), the deposit is refunded if no certificate issues, and any excess is refunded if the estimate was too high.

If the deposit was based on an estimated value, the applicant must undertake to file a sworn statement of the actual value and pay any additional tax within six months.

After the certificate is issued

Once the certificate has issued, the request goes to the Ministry of Finance, not the courthouse. It is made by filing or amending the Estate Information Return.

Two time limits apply. The information must have been provided within four years after the certificate was issued. The written request must be received within 12 years after the certificate was issued, or within 2 years after a notice of assessment or reassessment.

The return itself is due within 180 calendar days after the certificate is issued, even if no tax is payable. If you learn that information is incomplete or inaccurate, an amended return must be filed within 60 days of becoming aware.

Accuracy matters. Failing to file the required information, or making false or misleading statements, is an offence, although it is not an offence if the person did not know, and could not reasonably have known, that a statement was false.

Comparing the two routes

What to do next

• Find out whether the certificate has been issued.
• Gather statements, appraisals and any lender payout letters that show the correct value.
• Work out what changed: a wrongly counted debt, an overvalued asset, or an estimate that was too high.
• Note the issue date of the certificate and count the deadlines from it.
• Keep copies of everything you file or send.
• Speak with a lawyer or accountant if the amounts are significant or the dates are close.

How a refund applies to your estate depends on the facts, so it is worth confirming the details with a lawyer or accountant before you file anything.

Frequently asked questions