Estate trustees are generally required to deposit monies equal to the amount of the estate administration tax (“Tax”) payable under the Estate Administration Tax Act when they file an application for a Certificate of Appointment of Estate Trustee or a Small Estate Certificate (also known as probate, “Certificate”). However, there are a few exceptions to this general rule. 

A court may issue a Certificate where the applicant files the following: 

1. an affidavit that estimates the value of the estate and pays the deposit equal to the Tax calculated on the estimated value; and 
2. an undertaking that the applicants will file a sworn statement of the total value of the estate and pay the additional Tax payable if the actual estate value is higher than the estimated value. 

Applicants can also file a motion to defer the Tax payment under subsection 4 (1) of the Estate Administration Tax Act. Lastly, Tax is not required with applications for the following Certificates: 

1. Certificate of Appointment of Succeeding Estate Trustee with a Will
2. Certificate of Appointment of Succeeding Estate Trustee with a Will Limited to the Assets Referred to in the Will
3. Certificate of Appointment of Succeeding Estate Trustee without a Will
4. Certificate of Appointment of Estate Trustee During Litigation

Before Certificate is Issued

If applicants underpay or overpay the Tax based on the estate value reported in the application for the Certificate, the court will not issue the Certificate.  Instead, it will return the entire Tax payment to the applicants and issue a Registrar’s Notice requesting the applicants to pay the correct amount of Tax. The only exception to this is that a court will accept an underpayment if the applicants file an undertaking and an order to defer the payment of the Tax, as mentioned above. If the applicants discover that they have overpaid the Tax by misreporting the estate value before the Certificate is issued, they can request a partial refund from the court by filing an affidavit and supporting documentation. If applicants underpay the Tax by under-reporting the estate value, they must pay any additional Tax to the court and file an affidavit within six months of discovering any additional assets in accordance with subsection 32(2) of the Estates Act. The affidavit must disclose the value of the newly discovered assets.  

After Certificate is Issued 

As of January 1, 2020, estate trustees are generally required to submit an Estate Information Return (“EIR”) to the Ministry of Finance (“Ministry”) within 180 days after the Certificate is issued. The EIR requires estate trustees to provide detailed information about the assets in the estate. If the Certificate has been issued when estate trustees discover that they have overpaid the Tax, estate trustees will need to request a refund from the Ministry. It is informally known that the Ministry conducts an audit regarding the Tax paid before issuing any refunds. As of January 1, 2020, estate trustees must submit an amended EIR to the Ministry and pay any additional Tax payable within 60 days in the following situations: 

1.  If they discover any new assets that should have been included in the estate value after submitting the EIR; 
2. If they discover that they have reported incomplete or incorrect information within four years of the Certificate being issued; and 
3. After sharing the actual estate value with the court in accordance with the undertaking, if they applied for a Certificate using an estimated estate value. 

If estate trustees fail to submit or make false or misleading statements on the EIR, they may be fined at least $1,000 and up to twice the amount of the Tax payable by the estate, or they may be imprisoned for up to two years, or both.

Please note that the deadlines mentioned above may change in the future. 

The Ministry has a guide regarding EIRs that can be found here. The Government of Ontario also provides more information regarding EIRs that can be found here. 

Thank you for reading. 

Zahra Attir