Estate Administration Tax (E.A.T)

Did you know that as of January 1^st 2015 the Ontario Liberals put into effect a new tax called the Estate Administration Tax (E.A.T). The following outlines points on an article written by GuelphSpeaks on E.A.T. (For the full article, click the link at the bottom of this blog).

E.A.T is essentially a tax that is imposed on the estate of a deceased person. After death, your survivors and executors have exactly 90 days to report the value of all your belongings. Everything from valuables, cars and trucks, second homes, boats, RV’s, right down to the exercise bicycle in the basement. And depending on the size of the given estate, your fees owing could run into the thousands.

To give you a better idea, here are the current E.A.T tax rates.

•    $5 for each $1,000, or part thereof, of the first $50,000 of the value of the estate, 

           and

•    $15 for each $1,000, or part thereof, of the value of the estate exceeding $50,000.

Note: There is no estate administration tax payable if the value of the estate is $1,000 or less.

The estate administration tax is calculated on the total value of the estate. For example, for an estate valued at $240,000 the tax would be calculated as follows:

•    $5 per thousand for the first $50,000 of the estate
•    $50,000 ÷ $1,000 = $50
•    $50 X $5 = $250

Plus

•    $15 per thousand for the remaining $190,000 of the estate
•    $240,000 – $50,000 = $190,000
•    $190,000 ÷ $1,000 = $190 
•    $190 X $15 = $2,850

This means you would owe a total of $3,100 ($250 + $2,850) payable to the Minister of Finance. The E.A.T act states that the executors or appointed representatives must complete the E.A.T return within 90 days.

Want to know more? To read the full article, click the link below.

https://guelphspeaks.wordpress.com/2015/09/03/ontario-liberals-now-tax-your-stuff-after-you-die/