Are you an estate executor or trustee in Ontario? Here’s what you need to know, now! Effective January 1, 2015 Ontario Executors/Trustees (E/T) who applied for Probate, now called Estate Administration Tax (EAT) must also file the new Estate Information Return within 90 days of receiving the Certificate of Appointment of Estate Trustee.
Previously an E/T only had to estimate the total value of the estate, and provide a sworn affidavit. No supporting documentation was required. The administration of the fee was handled by the Ministry of the Attorney General. That responsibility and collection has now been transferred to the Ministry of Revenue/Finance. This is the department that used to collect Ontario’s PST. The government believes under the old system asset values were conservatively estimated, significantly underestimated or not considered at all.
Within 90 days of receiving the Certificate of Appointment the E/T must complete the Estate Information Return. This is a minimum 7 page document. More pages may be required based on the detailed number of assets in the estate. There is also a 13 page guide to help you work through the details.
The following is a list of the sections included in the information return, with extensive detail required in each section.
- Deceased person information
- Estate Representative Information
- Real Estate in Ontario; property assessment roll, property identifier no., fair market value at date of death, and more
- Bank Accounts; name of financial institution, account numbers, balance at date of death
- Investments; shares, stocks,, bonds and other investments with name of issuer, number of units, type and details of instrument or account no., name of broker/agent, fair market value at date of death etc.
- Vehicles & Vessels; includes motorcycles, boats, all-terrain vehicles, bicycles, snowmobiles etc.
- Other Assets (household contents, art, jewelry, loans receivable etc.)
After that there is the calculation of taxes owing, or refund. The last section is Certification that the information and documentation supplied is true, correct and complete.
There is a requirement to file an Estate Information Return even if the estate is equal to or less than $1,000. Estate representatives who fail to file the Information Return as required, or who make false or misleading statements on the return, are guilty of an offence and, on conviction, are liable to a fine of at least $1,000 and up to twice the tax payable by the estate, or imprisonment of not more than two years, or both. There is a four-year period from the date of filing the return in which the Ministry can conduct its review and audit. If the representative has already distributed the monies to the beneficiaries then the taxes and penalties are coming out of the representative’s pocket.
Does all this seem daunting? I am here to help. As I’ve mentioned before, being appointed an E/T should no longer be considered an honour. It is a time consuming and onerous responsibility, and not for the weak of heart or stomach. You should always consult a professional to help you through the maze of government reporting, in a timely manner. Inaccuracy and delays in dealing with these issues can be expensive and stressful.
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Until next time,