Supplementary Estate Administration Tax When New Assets Appear

You have finished the main work. The certificate of appointment of estate trustee was issued, the tax was paid and the return was filed. Then a forgotten bank account, an investment statement or a piece of property turns up. It is natural to worry that you did something wrong and that more tax is now owing.

Finding something late is common, and the law has a process for it. This article explains how the additional tax works, what has to be filed, how to pay, and why a prompt, accurate report matters. Your situation may have details that change the steps, so a lawyer or accountant can confirm them.

Does the new asset add to the estate value?

The first question is whether the asset belongs in the estate value at all. Ontario counts Ontario real estate (less encumbrances such as mortgages or liens), bank accounts including foreign banks, investments including TFSAs, RRSPs and RRIFs, vehicles and vessels wherever located, property held in another person's name, and business interests and insurance proceeds payable to the estate.

Other things are left out. These include assets the deceased owned earlier but not at death, jointly owned assets that pass automatically to the other owner, real estate outside Ontario, the CPP death benefit, and RPPs, RRSPs, RRIFs and TFSAs that have a named beneficiary. A registered plan counts only where there is no beneficiary designation, for example where it is payable to the estate.

Value is the fair market value at the date of death, supported by documents such as statements or appraisals.

What the law requires once you find it

If property is discovered after the certificate issues, a sworn statement of its value must be filed with the registrar within six months, and the tax on it is payable when that statement is delivered.

For estate certificate applications made on or after January 1, 2020, the tax is $15 for each $1,000 (or part of $1,000) of estate value above $50,000. Values are rounded up to the nearest $1,000 before the calculation. How the rate and the $50,000 exemption apply to a newly found asset, and how it combines with the original estate value, depends on your situation, so it is worth confirming with a lawyer or accountant.

Paying the additional tax

There are two routes. You can pay the additional tax to the court with an affidavit setting out the revised value and an explanation, or you can pay the Ministry of Finance, which issues a confirmation that you then give to the court.

The estate pays the tax. The estate representative is liable only in a representative capacity, and Ontario states the tax is paid by the estate, not by the representative.

If the original deposit was based on an estimate, the applicant gave an undertaking to file a sworn statement of the actual value and pay any shortfall within six months. A late-discovered asset and an estimate that turned out too low can both lead to extra tax, so check which applies to you.

Amending the Estate Information Return

The original Estate Information Return was due within 180 calendar days after the certificate was issued. A change in value usually means an amended return as well. Ontario's guidance gives three triggers: an estimate was used, information was wrong or incomplete, or new assets were found.

• Estimate used: amend within 60 days after the actual value is shared with the court.
• Wrong or incomplete information: amend within 60 days of discovery, within four years of the certificate.
• New assets: report and amend within 60 days after the statement is delivered to the court.

Returns can be filed online (the fastest route), by mail, courier, in person or fax.

Why prompt reporting matters

The Minister of Revenue may assess or reassess the tax. Assessments are generally allowed within four years after the tax became payable, but there is no such limit where there was a failure to comply with the information requirement, misrepresentation or fraud. Estate representatives must also keep records that allow the tax to be accurately determined.

Failing to file, or giving false or misleading information, is an offence. The penalty is a fine of at least $1,000 (up to twice the tax if more), up to two years' imprisonment, or both, and a reasonable-diligence defence exists. An honest oversight that you report promptly is very different from concealment, which is why speed and accuracy matter.

If you disagree with an assessment, a Notice of Objection must be filed within 180 days of the Notice of Assessment.

What to do next

• Write down the date you found the asset and how you found it.
• Gather statements or appraisals showing fair market value at the date of death.
• Check whether the asset is actually included or excluded, such as a plan with a named beneficiary.
• Note the six-month and 60-day deadlines and put them in your calendar.
• Prepare the sworn statement of value for the registrar.
• Choose how to pay: to the court with an affidavit, or through the Ministry of Finance.
• Amend the Estate Information Return.
• Keep all records, since the Ministry can ask for them.

If the numbers are large, the asset type is unusual or the deadlines are close, speak with an estate lawyer or accountant before filing. The Ministry can be reached at 1-866-ONT-TAXS (668-8297), Monday to Friday, 8:30 am to 5:00 pm.

Frequently asked questions