Death, Taxes and Taxes on Death

May 27, 2009 Hull & Hull LLP In the News, Litigation Tags: , , , , , , , , , , , 0 Comments

Ontario’s new harmonized sales tax is coming into effect on July 1, 2010. One of its effects will be to impose PST on funeral services: services that have previously been exempted from PST.

According to the harmonized sales tax, funeral services will now be taxed at the rate of 13%, up from 5%. The effect on a $5,000 funeral would be to raise the tax payable from $250 to $650.

The new harmonized tax may also have an effect on prepaid funeral services. According to a May 27, 2009 Toronto Star article, there are 224,257 prepaid funeral contracts in Ontario, and about 1 in 4 funerals in Ontario are prepaid.

The Ontario Minister of Finance has indicated that the government hopes to implement some sort of grandfathering clause, so that funeral services prepaid before a certain date remain exempted from the PST. However, nothing has been finalized yet. The cut-off date would likely be some time before July 1, 2010.

Those considering a prepaid funeral would be wise to complete their plans sooner rather than later. The new tax, like death, is approaching.

Thank you for reading.

Paul Trudelle

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