Estate Administration Tax is a fee charged by the Ontario government based on the value of estate assets owned by the deceased. Depending on the type and nature of the deceased’s estate assets, you may need an estate certificate to collect and manage the estate. To obtain authority for the executor to act on behalf of the deceased (Probate), the payment of this tax is mandatory.
It is important to note that there is a difference between estate assets and non-estate assets that effect the value of the Estate Administration Tax. Ultimately, only estate assets owned by the deceased are included in the total value of the property in the estate.
Examples of Estate Assets:
- Real Estate in Ontario (only when the title is not held jointly with a spouse)
- Bank accounts and financial investments (without a beneficiary)
- Vehicles and other personal property (without a beneficiary) such as:
- Insurance
- Goods
- Business interests
- Intangible property
Examples of Non-Estate Assets:
- Real Estate outside of Ontario
- Any assets that are expected to be paid to a designated beneficiary
- Assets with joint ownership that automatically becomes that of the other owner
- Debts owed by the deceased such as car loans, lines of credit, and credit card debts
Consequently, the less property one has in their estate when they die, the lower the Estate Administration Tax. The tax is paid as a deposit when the estate representative applies for a Certificate of Appointment of Estate Trustee with the Superior Court of Justice. Following changes in January 2020, you no longer need to pay Estate Administration Tax if the value of the estate is $50,000 or less. Instead, you must file an Estate Information Return within 180 days after the estate certificate has been issued. Therefore, the probate fees in Ontario are now $15 on every $1,000 of assets over $50,000.
At 6ix Estates LLP, we will work with you directly to structure your estate plan by drafting your Will and assisting with any estate administration applications. Contact us today for a 30-minute, no-obligation consultation.