Chan & Naylor
Sydney CBD Central

When a person passes away and the usual arrangements have concluded, there will come a time when other concerns such as tax returns and superannuation issues must be dealt with. If you are tasked with this responsibility, you would be known as the executor, also known as an administrator or a legal personal representative.

The executor holds the deceased person’s estate in trust and is the trustee. The estate includes the property and the assets that belonged to the deceased person with some exceptions (e.g. assets owned as joint tenants).

Here is a simple checklist that an executor must do when doing tax returns for a deceased person.

Tax Responsibilities of the Executor

The deceased person’s estate and the executor are treated as two separate taxpayers. Therefore, as well as locating the deceased individual Tax File Number (TFN) an executor may need to apply for a separate Tax File Number for the estate.

The executor is responsible for finalising the tax affairs of the deceased which includes:

  • Notifying the Australian Taxation Office (ATO) of the deceased person’s death
  • Lodging a final Tax return for individuals also called as a ‘date of death tax return’ on behalf of the deceased, or advising ATO that a tax return is not necessary
  • Lodging a prior year Tax return for individuals for the deceased person
  • Lodging of any other outstanding tax documents such as Business Activity (BAS) or Instalment Activity Statements (IAS)
  • Cancelling the deceased person’s Goods and Services Tax (GST) registration and Australian Business Number (ABN) if applicable
  • Discharging any related tax liabilities

As to the deceased person’s estate, the executor is also responsible for the following:

  • Lodging of any trust income tax returns
  • Discharging any related tax liabilities
  • In few instances, providing beneficiaries with instructions they need to include distributions in their own returns, and in certain cases, paying tax on their behalf

It is important for the executor to address any tax issues of the deceased person. If the executor distributes all the assets the estate to the beneficiaries before addressing any tax obligations, he or she may become personally liable for any outstanding tax debts or unknown tax obligations.

Disclaimer: Note that this information is general in nature and not specific advice to anyone.
Taxation, Superannuation, and business rules are constantly changing.
If you need more assistance or clarification with the process of tax returns for a deceased person, seek out advice from a professional tax return specialist.