Barrett: Ontario’s Estate Death tax amounts to tax on a lifetime of Hard Work and Sacrifice

By -

When the tax man becomes the grim reaper………‘The only sure things in life are death and taxes’. But, in Ontario, we must also regrettably add high government taxes after your dead.

Ontario residents pay taxes their entire lives, on hard work and savings, on income and investments. We also pay taxes on the things we buy and cherish – be it the car in the garage or the painting on the wall. The people of Ontario recognize the importance of certain taxes to pay for the services we need and to support our most vulnerable. But a new approach now focusses on an accelerated gathering of taxes after death.

Ontario’s estate death tax amounts to a tax on a lifetime of hard work and sacrifice. It punishes families who have been saving for the future and the future of their family. It punishes people who have spent their lives building a farm or business from the ground up. A person’s assets should be available for their children, or charitable causes they hold dear, not taxed and then re-taxed upon death.

As of Jan. 1, 2015, executors are required to file an Estate Information Return with 90 days after an estate certificate is issued by the court. What’s new is the appraisal of all estate property, from real estate to automobiles to personal property, must be done by a professional evaluator. And, if the return is not filed before 90 days, the executor can face penalties ranging from heavy fines to imprisonment for up to two years.

On the other hand, the Ministry of Finance may take up to four years to review estate returns and conduct audits and can assess if further tax is payable even after an estate has been distributed.

These changes are cold-hearted and not rooted in reality. Most often the executor is the child of the deceased.  When more and more people are leaving Ontario to find jobs, these changes have left families scrambling to file  paperwork in their busy lives while still reeling from the loss of a loved one.

A Private Member’s Bill introduced by my caucus colleague Monte McNaughton aimed to change all of this. McNaughton’s bill would eliminate the 90-day deadline, eliminate taxes on estates valued at less than $50,000 value,  eliminate punitive penalties for breaches of the act, remove taxes on charitable donations and cap the Estate Administration Tax at $3,250. Unfortunately, the Liberal and NDP vote killed his proposed legislation.

Grieving families deserve compassion and peace of mind, not the taxman at their door demanding an immediate cataloguing of their loved one’s belongings.

Like they say, you can’t take it with you – but you certainly don’t want it taken from your heirs.

The provincial government claims these reason for these changes is to protect against fraud through the undervaluation of property. However, the deliberate undervaluation of the value of an estate is already legislated as illegal activity. We in the Official Opposition see it as a cash grab to support government waste and out-of-control spending.

Instead of turning its back on grieving widows and children, government should be providing support. That’s why MPP McNaughton will continue to pressure government to show more compassion in their death tax collection process.

Ontario’s Opposition will continue to work to eliminate the abusive aspects and punitive nature of Ontario’s Estate Administration TaxFor the Silo, Haldimand-Norfolk MPP Toby Barrett

Click Me!

Click Me!

1 Comment to Barrett: Ontario’s Estate Death tax amounts to tax on a lifetime of Hard Work and Sacrifice

  1. November 9, 2015

    UPDATE

    The Liberal Government have voted down Leader of the Official Opposition Patrick Brown’s Private Member’s Bill, the Estate Administration Tax Abolition Act, which proposed the elimination of the so-called Death Tax.

    The Estate Administration Tax – also known as the Death Tax – hits grieving families with tax bills payable on the net value of the assets of the deceased. While the Death Tax was initially introduced as a probate fee designed to cover the cost of processing a deceased’s will and assets, over time it has ballooned into a burdensome, unnecessary and insensitive tax.

    This tax recently became more problematic for grieving families when the provincial government decided to make additional changes to the tax that have left families filing paperwork while still reeling from the loss of a loved one. Some of the changes include a 90-day filing period, and stiffer penalties for non-compliance, including potentially two years in jail.

    Under the Liberals, life in Ontario has become more and more unaffordable. There’s the HST, eco-taxes, health taxes, beer taxes, gas taxes and now the potential expansion of the land transfer tax on home buyers.

    Ontario has the highest graduated Death Tax of any province and territory in Canada. An estate in Ontario valued at $500,000 would pay $7,250 in tax; whereas that same estate would pay $65 in Quebec, $400 in Alberta, $2,500 in New Brunswick and $3,500 in Saskatchewan.

    Unfortunately, it’s becoming obvious the Wynne Government needs to increase taxes in order to pay for scandal, waste and mismanagement, Today the provincial Liberals and the NDP voted to continue taxing Ontarians to death, at death, and after death.

    For more information contact me, Haldimand-Norfolk MPP Toby Barrett at 519-428-0446 or toby.barrett@pc.ola.org Please mention the Silo when contacting.