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Tax and Estate Planning Updates

The 2019 Ontario budget announced two changes in the provincial Estate Administration Tax (otherwise known as probate fees).  

Many of you were aware that Ontario probate fees have been $250 or 0.5% on the first $50,000 of a probated estate and 1.5% on assets above $50,000.  The latest change eliminates the Ontario Estate Administration Tax (probate fee) on the first $50,000 of an estate's assets.  The 1.5% charged on estate's asset value in excess of $50,000 remains, as does the requirement to file and Estate Information Return.

Those of you who have acted as an Executor recently, may be aware of the requirement introduced January 1, 2015 that an Estate Information Return umst be filed with the MInistry of Finance after the will has been probated.  The recent changes allow Executors 180 days (instead of the previous 90 days) to submit this Estate Information Return. 

It is good news, that the Ontario Estate Administration tax (probate fees) will be reduced, and the time allowed to file the Estate Information Return has been lengthened.  However, they are small changes.  With segregated funds, the ability to name a beneficiary directly  is one easy way to ensure assets completely bypass probate and that those assets do not have to be reported on the Estate Information Return.  Jon Hreljac, Manulife’s AVP of Tax, Retirement and Estate Planning services, recently wrote an article about these changes to Ontario’s estate administration.  Click here for details.

The 2019 Federal Budget also brought good news, increasing the federal basic personal amount, which should reduce income tax for nearly 20 million Canadians, and could eliminate federal tax for over 1 million low-income Canadians.  The Basic Personal Amount is a Non-Refundable Tax Credit was $11,809 in 2018.  The budget proposes to increase the Basic Personal Amount from its to $15,000 by 2023.  These changes also apply to the spouse or common-law partner amount (the spousal amount), and to the eligible dependant credit.   Click here for an article from Manulife's Tax, Retirement & Estate Planning Services Team outlining details of  the changes to the Basic Personal Amount.  

Each year, there are changes and updates to Canadian taxes and benefits, and as your financial advisor we are committed to keep you informed.  Manulife's Tax, Retirement and Estate Planning Services team has put together a summary that outlines Marginal Tax Rates per province, tax rates for income vs. dividnends and capital gains, TFSA and RRSP contribution limits, updates on Tax Credits, EI premiums, CPP contributions, CPP and OAS benefits.  The 2020 Tax Rate Card is available for you to download here.  Always speak with your professional tax preparer prior to making decisions regarding your personal situation. 

If you have any questions or would like to discuss how these ideas impact your portfolio or financial plans, please give us a call.