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Re Eurig Estate, [1998] 2 SCR 565 (Link)

Facts:

Provinces can only raise revenue through direct taxation (Direct tax: imposed on a person who is expected to bear the brunt of it. Indirect tax: imposed on the person who has obligation to pay it, but with the expectation that the tax will be passed on to another (e.g. customs or excise duty)

Case involves a challenge to the prov imposition of probate fees. Under the Act, the executor had to pay probate fees; then the executor could recover those fees from the estate (estate is the beneficiary).

Issue(s):

Is the estate indirectly paying? Is it:
** 1. Tax is imposed on the executor; executor claims the tax from the beneficiary (an indirect tax); OR
** 2. Executor is never personally responsible for the tax; the beneficiary is the only person liable for the tax (a direct tax)?

Ratio:

An executor of an estate plays the role of collection agent only and is not personally responsible for the tax on the estate; therefore a provision imposing probate fees is acceptable as it constitutes a direct tax (and is therefore within the purview of the province).


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