Jan 6, 2025
What is Estate Administration Tax?
An important thing to consider when applying for a probate certificate (or a “Certificate of Appointment of Estate Trustee”) is the tax owing on the Estate. This tax is referred to as Estate Administration Tax (“EAT”), and it is based on the total value of all assets held by the deceased as of date of death. Payment of the EAT must be submitted along with your probate application at the time of filing.
There are certain circumstances where Estate Administration Tax is not required. For the purposes of this blog, we will go over how to determine the amount of tax payable when you are applying for a Certificate of Appointment of Estate Trustee (with or without a will).
Calculating Estate Administration Tax
When determining the value of the estate, you should add the values of all assets held by the deceased as of date of death. Liabilities owed by the estate are not subtracted from the value of estate assets, except for any registered mortgages towards a property owned by the deceased. Any accounts held by the deceased that name a designated beneficiary or were jointly held and pass by the right of survivorship should not be included in the value of estate assets.
Estate Administration Tax does not apply for the first $50,000 of the estate. The remaining value of the estate is rounded up to the nearest thousandth and then calculated by applying $15 per $1,000.
For example, if the total value of the estate is $372,782.12:
Step 1: Round to the nearest thousandth
$372,782.12 => $373,000
Step 2: Subtract the first $50,000 of the estate value
$373,000 – $50,000 = $323,000
Step 3: Divide by $1000
$323,000/$1000 = 323
Step 4: Multiply by $15
323 x $15 = $4,845
Once you have determined the amount of EAT owing, you should arrange payment by certified cheque or bank draft made payable to the “Minister of Finance”.
It is good practice to always double check your calculations when determining EAT. You may also use an online calculator to assist you with your calculations such as this one: https://www.ontario.ca/page/calculating-estate-administration-tax
Stacie Chrysanthopoulos
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
Apr 26, 2024
In my previous blog about probate, we discussed what “probate” or a “Certificate of Appointment of Estate Trustee” is, and the different residency and security requirements for probate in Ontario, depending on whether the deceased person had a Will. Sometimes, clients will come to us having already obtained probate or been appointed as estate trustee in a jurisdiction outside of Ontario, then discovering that the deceased owned a bank or investment account in Ontario and needing Ontario probate to get that asset liquidated. In today’s global landscape, we are encountering these situations with increasing frequency.
Where the deceased did not have an Ontario Will, the Estates Act provides that estate trustees can apply for a “Resealing of Appointment of Estate Trustee” or an “Ancillary Appointment of Estate Trustee” in Ontario. Resealings and ancillary appointments have the same effect of recognizing the foreign grant of probate in Ontario as if it were originally granted by the Ontario Superior Court of Justice. In other words, a resealing or ancillary appointment will provide the estate trustee with authority to act on behalf of the estate in Ontario and administer the Ontario assets. The difference between the two is where the original grant of probate was obtained.
Where the applicant was appointed as estate trustee by a court (a) outside of Ontario but within Canada, or (b) outside of Canada but in a Commonwealth country, they should seek a Resealing of Appointment of Estate Trustee. The applicant does not have to be an Ontario resident, and their foreign estate trustee appointment could have been made with or without a Will. A bond is required unless the original grant of probate was made with a Will and the applicant is a resident of Canada or elsewhere in the Commonwealth. The amount of the bond may be dispensed with or its amount reduced by the court in special circumstances.
If the applicant was appointed as estate trustee by a court that is not part of the Commonwealth, they should seek an Ancillary Appointment of Estate Trustee. The applicant does not have to be a resident of Ontario. A bond is required unless the applicant is a resident of Canada or the elsewhere in the Commonwealth. The amount of the bond may be dispensed with or its amount reduced by the court in special circumstances.
If you find yourself unsure about what kind of probate to apply for or which forms to submit, feel free to reach out to our team and schedule a consultation with us.
Zara Wong
Nothing contained in this post constitutes legal advice or establishes a solicitor-client relationship. If you have any questions regarding your legal rights or legal obligations, you should consult a lawyer.
