- Because the two charges are calculated on entirely different bases, there is no reason to expect them to be similar amounts — and estates are sometimes surprised that one is much larger…
- Estate Administration Tax - Paid when the estate trustee applies to the Ontario Superior Court of Justice for an estate certificate.
Executors administering an Ontario estate often lump "the taxes on death" together into one worry. In reality, there are two separate charges at play, calculated on different bases, paid to different governments, and due at different times. Understanding probate fees vs income tax as distinct obligations — rather than one combined bill — helps an executor plan the estate's cash flow and avoid missing either one.
This article lays out what each charge is, how it's calculated, and how they interact.
The Two Charges, Side by Side
| Estate Administration Tax (probate fees) | Income tax at death | |
|---|---|---|
| What it is | An Ontario provincial tax paid to obtain an estate certificate from the court | Federal (and Ontario) income tax on the deceased's income, including capital gains from deemed disposition of property |
| Who calculates it | Based on the value of the estate's assets that require probate | Based on the deceased's income for the year, including any capital gains |
| When it's paid | Generally when applying for the estate certificate | Reported on the deceased's final ("terminal") T1 return, with any resulting balance due like any other tax debt |
| What it applies to | Only "probatable" assets — generally not jointly held property with right of survivorship, or assets with a named beneficiary such as RRSPs, TFSAs, and life insurance | The deceased's income and gains for the year, regardless of whether the underlying assets pass through probate |
| Current Ontario rate | $0 on the first $50,000 of estate value; $15 per $1,000 (1.5%) on the value above $50,000, rounded up to the nearest $1,000 (as of mid-2026 — verify the current rate before relying on it) | No single flat rate — determined by the deceased's overall income and applicable credits for the year |
Why the Two Amounts Rarely Match
Because the two charges are calculated on entirely different bases, there is no reason to expect them to be similar amounts — and estates are sometimes surprised that one is much larger than the other.
An estate consisting mostly of jointly held property and assets with named beneficiaries might attract very little Estate Administration Tax, because most of the value bypasses probate. But that same jointly held property and those same named-beneficiary assets can still generate significant capital gains on the deceased's terminal return if they've grown substantially in value — the deemed disposition rules for income tax purposes don't care whether an asset needed probate.
The reverse can also be true: an estate holding mostly cash or recently acquired property (little embedded gain) might owe relatively modest income tax at death, while still owing a meaningful Estate Administration Tax if the total estate value is large.
Filing and Reporting Obligations for Each
Estate Administration Tax
- Paid when the estate trustee applies to the Ontario Superior Court of Justice for an estate certificate.
- An Estate Information Return must generally be filed with the Ontario Ministry of Finance within 180 calendar days after the estate certificate is issued, detailing the assets used to calculate the tax.
Income tax at death
- A terminal T1 return covers the deceased's income up to the date of death, including capital gains from deemed disposition of capital property.
- If the estate continues to hold property and earn income after death (before final distribution), it typically needs its own T3 Trust Income Tax and Information Return for that period.
- A deceased's estate can generally access graduated tax rates only during a limited initial period after death, under the "graduated rate estate" regime — most other trusts, and the estate once that window ends, are taxed at the top marginal rate with no basic personal exemption.
Why Executors Should Track Both Separately
- Missing either obligation creates real exposure. The Estate Administration Tax is checked when the Ministry of Finance reviews the Estate Information Return; unpaid income tax follows the estate (and potentially the executor) the way any unpaid tax debt does.
- An executor who distributes before clearing both risks personal liability. This is particularly true on the income tax side — an estate trustee who distributes assets before obtaining a CRA Clearance Certificate can become personally responsible for any of the deceased's or the estate's unpaid taxes.
- The two obligations don't offset each other. Paying the Estate Administration Tax does not reduce or satisfy any income tax owing, and vice versa.
Frequently asked questions
Do we pay probate fees on the same value used to calculate income tax?
No. The Estate Administration Tax applies to the value of probatable assets. Income tax at death is based on the deceased's income and capital gains for the year, which can include assets that never go through probate at all.
If an asset passes outside the estate to a named beneficiary, is it completely tax-free?
Not necessarily. It may avoid the Estate Administration Tax, but capital gains on that same asset (from the deemed disposition at death) can still need to be reported and taxed on the deceased's terminal return, depending on what the asset is.
Which is due first, probate fees or income tax?
Estate Administration Tax is typically paid when applying for the estate certificate, often early in the estate administration process. Income tax owing is determined once the terminal return (and any subsequent estate returns) are filed, which can happen later — but both need to be addressed before final distribution to protect the executor.
Is municipal property tax part of either of these calculations?
No. Municipal property tax, based on MPAC assessments, is a separate, ongoing annual charge on real property and shouldn't be confused with either the Estate Administration Tax or income tax at death.
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