Our Richmond Hill estate tax law lawyers have assisted numerous clients across York Region and the GTA with their estate tax law needs.
Estate administration tax is applied to the value of the estate of a deceased individual if an estate certificate has been issued. Typically, the tax is paid as a deposit when an individual applies for an estate certificate from the Superior Court of Justice. In the event an estate certificate has not been issued or applied for then no estate administration tax is owed. If you’ve applied for an estate certificate but a certificate has not yet been issued, then your deposit will be refunded.
Determining the Value of the Estate
The value of the estate is based on the value of all assets owned by the deceased individual at the time of their death. These assets include but are not limited to:
- Real estate in Ontario (does not include encumbrances such as mortgages, collateral mortgages or liens) The value is based on the appraised value at the date of death
- Domestic and foreign bank accounts
- Investments
- Domestic and foreign vehicles and vessels
- Any and all property under the deceased individual’s name at the time of death including if it is under someone else’s name but owned (even partially) by the deceased individual
- Other property including goods, businesses, intangible property and insurance if the proceeds have been left to the estate
Assets that are typically not included in determining the value of the estate (unless explicitly stated) include but are not limited to:
- Assets the deceased had before death but not at the time of death
- Assets where there is joint ownership automatically become assets of the other owner(s)
- Real estate outside of Ontario
- CPP death benefits
- Investment accounts with a beneficiary designation or declaration
- RDSPs which the deceased subscribed to but was not a beneficiary
- Debts owed by the deceased individual such as credit card debts, car loans, lines of credit, etc.
Non-Deductible Estate Expenses
The following expenses are not eligible to deduct the value of the estate:
- Funeral expenses
- Lawyers’ or accountants’ expenses
- Loans and interest payments
- Owing debts on vehicles, lines of credit or credit cards
- Unregistered loans
- Real estate commissions
Calculating & Paying Estate Administration Tax
If you have applied for an estate certificate on or after January 1, 2020 you do not need to pay estate administration tax if the estate value is less than $50,000. You are required to file an Estate Information Return within 180 days after the estate certificate has been issued and this is something an estate tax lawyer can assist you with. If your estate is valued greater than $50,000 then the typical estate administration tax is calculated at $15 for every $1,000 of the value of the estate.
It is important to note that some additional nuances and exceptions may apply depending on the complexity of the estate. For example, if the estate has assets located on a reserve — certain properties may be exempt from taxation. For this reason, we strongly recommend you consult an estate administration lawyer at your earliest opportunity to make sure you have covered everything.
Payment for estate taxes need to be submitted to the Minister of Finance as a cheque and is paid by the estate rather than an estate representative.
Contact our Richmond Hill Estate Tax Law Lawyers Today
If you or a loved one require assistance with estate administration contact our law firm today by filling in the form below or calling us at (905) 884-9242.
