Bill 120 2015

An Act to amend the Estate Administration Tax Act, 1998

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

   1.  (1)  Subsection 1 (1) of the Estate Administration Tax Act, 1998 is amended by adding the following definitions:

"2015 transition day" means the day the Estate Administration Tax Fairness Act, 2015, receives Royal Assent; ("jour de transition en 2015")

"encumbrance" means a claim that secures the payment of money or the performance of any other obligation and includes a charge under the Land Titles Act, a mortgage and a lien; ("charge")

   (2)  The definition of "value of the estate" in subsection 1 (1) of the Act is amended by striking out "less the actual value of any encumbrance on real property that is included in the property of the deceased person" and substituting "less the actual value of any encumbrance on any such property and any amounts bequeathed or devised by the deceased person for a charitable purpose".

   (3)  Section 1 of the Act is amended by adding the following subsection:

Bequest to charity

   (1.1)  For the purpose of the definition of "value of the estate" where a bequest or devise is in the nature of a percentage of the residuary estate, the value of the estate shall be reduced by that percentage.

   2.  (1)  Subsection 2 (6) of the Act is revoked and the following substituted:

Amount, certificate sought after June 7, 1992 and before 2015 transition day

   (6)  The amount of tax payable upon the issuance of an estate certificate for which application is made after June 7, 1992 but before the 2015 transition day is,

  (a)  $5 for each $1,000 or part thereof of the first $50,000 of the value of the estate; and

  (b)  $15 for each $1,000 or part thereof by which the value of the estate exceeds $50,000.

Amount, certificate sought on or after the 2015 transition day

   (6.1)  Subject to subsection (6.2), the amount of tax payable upon the issuance of an estate certificate for which application is made on or after the 2015 transition day is determined as follows:

    1.  If the value of the estate is $50,000 or less, the amount of tax payable is nil.

    2.  If the value of the estate is greater than $50,000, the amount of tax payable is the sum of,

            i.  $5 for each $1,000 or part thereof by which the value of the estate exceeds $50,000 but is equal to or less than $100,000; and

           ii.  $20 for each $1,000 or part thereof by which the value of the estate exceeds $100,000.

Maximum tax

   (6.2)  The total amount of tax payable in respect of an estate certificate for which application is made on or after the 2015 transition day shall not exceed $3,250.

   (2)  Subsection 2 (7) of the Act is amended by adding "subject to subsection (6.2)" at the end.

   3.  Subsection 4.1 (1) of the Act is amended by striking out "or on or after such later date as may be prescribed by the Minister of Finance" at the end and substituting "and before the 2015 transition day".

   4.  (1)  Subsection 6 (1) of the Act is amended by adding the following clause:

(c.1) respecting any transitional issues that may arise relating to the amendments made by the Estate Administration Tax Fairness Act, 2015;

   (2)  Section 6 of the Act is amended by adding the following subsection:

Conflict

   (4)  In the event of a conflict between a regulation made under clause (1) (c.1) and a provision of this Act or of another Act or a regulation made under another Act, the regulation made under this Act prevails.

Repeals

   5.  The following provisions of the Act are repealed:

    1.  Subsection 1 (2).

    2.  Section 4.1.

    3.  Sections 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8 and 4.9.

    4.  Subsection 5 (1.1).

    5.  Section 5.1.

    6.  Section 6.1.

Commencement

   6.  (1)  Subject to subsection (2), this Act comes into force on the day it receives Royal Assent.

Same

   (2)  Section 5 comes into force on a day to be named by proclamation of the Lieutenant Governor.

Short title

   7.  The short title of this Act is the Estate Administration Tax Fairness Act, 2015.

 

EXPLANATORY NOTE

Currently, the Estate Administration Tax Act, 1998 provides that the value of the estate of a deceased person does not include the value of any encumbrance on real property owned by the deceased person. The Bill amends the Act so that the value of any encumbrance on any property is excluded from the value of the estate. In addition, the value of a bequest or devise made for a charitable purpose is not included in the value of the estate.

The Act also changes the amount of estate administration tax payable starting on the day the Bill receives Royal Assent. For an estate worth $50,000 or less, the amount of tax payable is nil. The amount of tax for an estate worth more than $50,000 is $5 for every $1,000 by which the value of the estate is greater than $50,000 but less than $100,000, and $20 for every $1,000 by which the value of the estate is greater than $100,000. The maximum amount of tax payable under the new provisions is $3,250, with the result that no estate bears a greater estate administration tax liability under the new rate structure than it does under the current rate structure.

The Bill also repeals amendments made to the Act by the Better Tomorrow for Ontario Act (Budget Measures), 2011. Major features of that Act are provisions requiring information about estates to be given to the Minister of Finance and provisions relating to the assessment of estates in respect of their estate administration tax payable under the Act.