July 17, 2019

Collection of Probate Tax … Executors Beware!

IMPORTANT STEPS AND THE COLLECTION OF PROBATE TAX

On January 1 2013 the amendments to the Ontario Estate Administration Tax (EAT and commonly known as Probate Tax) announced in the 2011 Ontario Budget became effective. There have been several audits since.

Key elements of these amendments that Estate Administrators / Executors need to be aware of are:

  • The collection of Probate Tax will now be the responsibility of the Minister of Revenue.
  • The EAT inspectors will have broad powers related to audit and enforcement.
  • Estate Administrators will now have to provide detailed information related to the deceased as requested by the Application for Certificate of Appointment and the EAT Inspectors.
  • Estate Administrators will be required to keep detailed accounts, records and documentation related to the assessment of the EAT.
  • Failure to provide the information and / or intentionally providing false or misleading information is an offence with significant penalties.
  • EAT can be assessed or reassessed by the Minister of Revenue within 4 years of the date that the tax became payable.
    • This provision could allow the Minister of Revenue to issue a reassessment of the tax payable long after the assets of the estate have been distributed.
    • The Estate Administrator may object to the assessment within 6 months but will need to provide specific details related to the assets, issues and reasons for the objection.

Estate Administrators would be well advised to locate and document the estate assets as quickly as possible. Then have the assets professionally appraised.

CONTACT US

Feel free to contact us at any point for assistance or advice with respect to Estate Law, Estate Planning, Estate Administration or Estate Litigation. We may be reached at 705-435-4339 / 1-877-85LEGAL (1-877-855-3425) or contact us via email .