Deceased Estates

Posted on 12th September 2014 by Christabelle Harris

When someone close to you passes away it is an emotional time. At a time when you are grieving for a loved one, the last thing you want to consider is financial and taxation issues. Unfortunately, this is a reality, but please know that we are here to help make this part of the process easier for you.

Deceased estates are taxed differently from individuals and other Trusts. It is the executor’s responsibility for managing the deceased estate and ensuring all taxation requirements are fulfilled.

When a person passes away there is generally a requirement to lodge two income tax returns.

Firstly, there will be a final personal tax return for the deceased for any income earned from the start of the financial year until the date of death.

Secondly, there may also be a tax return for the deceased estate for any income from the date of death to the end of the financial year. An estate return may need to be lodged for each income year until the deceased estate is fully administered.

A deceased estate will be taxed at individual rates with the benefit of the full tax-free threshold for the first three tax returns while the deceased estate is being administrated. If the administration goes beyond the three years then special tax rates apply which are significantly higher than individual tax rates.

Deceased estates have specific rules surrounding lodgement and taxation of estate income and assets. We recommend you contact our office should your required any assistance in administering the tax affairs for an estate.