Time for a change to how much Ontario charges for its estate administration tax?
Toronto estate lawyer Barry Corbin thinks so. He’s gone so far as to send a letter to every Ontario MPP back in early 2013, but only one MPP responded in any way.
Conservative Monte McNaughton brought forward a private member’s bill asking for a $3,250 cap on the tax, but it was voted down on September 24 – 41 MPPs said ‘nay’, and only 9 said ‘yay’.
How much tax do I have to pay when an estate transfers from one family member to another?
Ontarians pay the highest tax in Canada: $5 per $1,000 for the first $50,000, with an increase to $15 per $1,000 after that mark.
The CRA needs to get their taste as well! They treat the transfer of an estate from one family to another as a sale. They hit up all of your assets with capital gains tax. The CRA taxes whatever profit your estate has made, and taxes 50% of those profits at your marginal tax rate.
The best way to avoid paying out to the government? Give away your assets to family and friends BEFORE you die.
You pay no tax on gifts while you’re living.
BUT, this approach easily creates strife between family members, especially if multiple siblings or relatives are determined to grab what they believe to be their fair share of an inheritance!
Many Canadian families take this approach, which creates stress and leads to expensive court battles. In light of this fact, shouldn’t the government reduce the tax hit to make the estate transfer process more worry free?