Deceased Estate Tax Return in Geelong

What is a deceased estate?

When a person dies, their assets and possessions are known as their deceased estate.

These assets can be items such as properties, land, money, cars,… Business(es) that the person was a sole or part owner at the time of death are also part the assets.

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Tax and the deceased estate

For taxation purposes, a deceased estate is treated as a Trust, and is made up of three parts:

  • asset of the deceased estate,
  • beneficiaries, and
  • the trustee (which is often the legal personal representative).

The tax on the income derived from a deceased estate can be complex and difficult to work out.

It is therefore advisable that you contact an experienced Tax Advisor.

Our experienced staff at Geelong Tax Services is very experienced with tax issues and deceased estates.

Contact us and we will happily advise you, or the legal advisor and administrator of the deceased estate.

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What is involved in a deceased estate tax return?

After the death of a person, to deal with the deceased estate tax return, you will need to lodge:

  1. a final personal Income Tax Return from 1 July to the date of death, and
  2. a Trust Income Return for the deceased estate may also be needed to be prepared by the trustee.

The Trust Income Return should be treated as a separate Tax Return. It only applies to the income received, if any,  from the deceased estate after the death of the person.

Whether a trustee needs to lodge a Trust Income Return will depend on whether the deceased estate:

  1. received capital gain,
  2. received dividends,
  3. derived income from which tax has been withheld,
  4. received income from business carried.

If you need help or advice on any of these matters, feel free to contact us. We are only too happy to advise you according to your specific situation.

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Who will pay the tax on a deceased estate?

The party who will pay the tax on the deceased estate will depend on many factors.

And this tax may be paid by the beneficiaries of the estate or by its executor (the trustee).

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Tax rates and deceased estates

For the first three year after a death, the deceased estate will be taxed at the general individual tax rate. There is however the benefit of full tax-free threshold.

For the fourth and later income year, a special progressive tax rate will apply.

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Who lodges an Income Tax Return and a Trust Tax Return for a deceased person?

It is the appointed executor, under the term of the will, who should lodge an Income Tax Return and a Trust Tax Return.

If you are such an executor, we recommend that you contact us so we can help you with both the Income and the Trust Tax Returns.

You will of course need to bring a copy of the will, and the name and contact detail of any legal advisor or solicitor.

We will then be able to establish the relevant assets, cost bases and income derived.

This will help us prepare the appropriate documentation to lodge the Income Tax Return and Trust Tax Return.

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