Which Assets Count Toward Ontario Estate Administration Tax?

The Estate Administration Tax is based on the value of the estate, so knowing which assets count is the key to getting the number right. Some assets are included, some are left out, and a few depend on how they were set up before death.

This article gives a plain overview for Ontario. Complicated holdings, such as business interests or property in several places, often need professional help, so treat this as a starting point.

Assets that are included

The 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. When a certificate is sought, the estate's value is what drives the amount.

For estate 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 estate's value over $50,000. The estate's value is rounded up to the nearest thousand dollars. Applications made before January 1, 2020 used older rates.

The estate's value includes Ontario real estate, valued at its appraised value on the date of death, less encumbrances such as mortgages or liens.

Also included are bank accounts (including at foreign banks), investments, vehicles and vessels wherever located, property held in another person's name, business interests and other property wherever situated.

• Ontario real estate, net of registered mortgages and liens
• Bank accounts, including foreign accounts
• Investments and business interests
• Vehicles and vessels wherever located
• RRSPs, RRIFs and TFSAs where the estate is the beneficiary
• Insurance if the proceeds are payable to the estate

Assets that are 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. By contrast, if the beneficiary of an RRSP, RRIF or TFSA is the estate, it is included.

Other items left out are real estate outside Ontario, CPP death benefits, and RDSPs where the deceased was a subscriber but not a beneficiary.

Joint property needs a closer look

How a property was held makes a real difference. When a joint tenant dies, the surviving co-owners inherit the deceased's share. That share generally stays out of the estate's value.

Tenants in common are different. A tenant in common's share does not pass automatically to the other owners. It becomes part of their estate, so it counts toward the estate's value if probate is sought.

If you are not sure how a home or account was held, check the title or account documents and ask a lawyer to confirm what they mean.

Valuing assets and what you can deduct

Assets are valued at their fair market value at the time of death. Real property is valued at its appraised value at the date of death, even if it sells for more or less shortly afterwards.

Estate representatives must be able to back up the 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.

Only encumbrances on real property can be deducted. A mortgage, collateral mortgage or lien registered against real property in the estate can be deducted from that property's value. Funeral expenses, lawyer's fees, loans and interest, vehicle debt, credit card debt, real estate commissions, unregistered loans and lines of credit do not reduce the estate's value.

Special certificates and what to do next

Some certificates change what is counted. If the court issues a certificate limited to the assets in a specific will, only the assets in that will count. For resealing, ancillary and foreign nominee certificates, only assets located in Ontario are used to calculate the tax.

The value also matters after the certificate is issued. The estate representative must file an Estate Information Return with the Ministry of Finance within 180 calendar days after the certificate is issued. This is required even when the estate is worth $50,000 or less and no tax is owed. The tax is paid by the estate, not personally by the estate representative.

If an estimate or a missed asset turns out to change the value, an amended return may be needed. The timing depends on the situation, so it is worth confirming with a lawyer or accountant.

• List every asset and note how it is held: sole name, joint, or tenants in common.
• Check beneficiary designations on insurance, RRSPs, RRIFs and TFSAs.
• Obtain date-of-death statements and an appraisal for any real estate.
• Collect mortgage and lien documents for registered encumbrances.
• Ask a lawyer or accountant about business interests, foreign assets or limited certificates.

Frequently asked questions