Ontario Government Provides Tax Break on Small Estates

In order for an Estate Trustee to obtain a certificate of appointment (with or without a will) they will have to pay the estate administration tax.

Previously the estate administration tax (“EAT”) was $5.00 per $1,000 for the first $50,000 of the estate value and $15.00 per $1,000 for the estate value in excess of $50,000.

The Ontario government amended the Estate Administration Tax Act, 1998, S.O 1998, c.34 and provided a tax break on Estates that had a value of $50,000 or less. Effective On January 1st, 2020, there will be no EAT calculated on the first $50,000 of the Estate Value, but the tax will remain on the value of assets reported over $50,000.

It is important to keep in mind that the following property is excluded from the calculation of the EAT:

• real property situated outside of Ontario;

• property owned by the deceased jointly with one or more other persons, where there is a right of survivorship;

• the proceeds of life insurance payable on the death of the deceased to a designated beneficiary; and

• any benefits payable under a “plan”, as defined under part three of the succession law Reform Act, to a designated beneficiary.

Thank you for reading,

Rick Bickhram

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