1 Page 1 of 13 Managing the tax affairs of someone who has died Introduction This guide will help you finalise the tax affairs of a deceased person. It tells you what tax returns you may need to lodge and how the tax liability will be worked out. General law The law that applies to the assets and income of a deceased person depends on which state or territory of Australia the deceased person lived in when they died. If you have been appointed as an executor or administrator of the estate of a deceased person, you will be responsible for managing the deceased estate's tax affairs, as well as: carrying out (executing) the terms of the deceased person's will, or complying with the relevant inheritance laws where there is no will. You can find more information about the inheritance laws that apply in your state or territory by contacting the Public Trustee Office. Wherever the word executor is used in this document, it applies equally to an executrix, trustee, administrator or legal personal representative. Taxation law There are no death duties in Australia. However, the Income Tax Assessment Act 1997 does tax certain income or capital transactions that occur as a consequence of a person's death. The tax consequences are different from the perspective of: the deceased person the executor, or a beneficiary of the deceased estate. What is a deceased estate? The property and assets belonging to a person who has died is called their deceased estate. The deceased estate is held in trust from the death of the person until the transfer of the property and assets to the beneficiaries. The deceased estate is considered to be a trust during this period. Unlike a natural person or a company, a trust is not a legal entity in its own right, but a relationship involving a trustee and the beneficiaries. The executor of the estate is the person who holds the deceased estate in trust. That person is the trustee for the deceased estate trust. The executor is responsible for administering the deceased estate in the best interest of the beneficiaries. Beneficiaries are those people who share in the deceased estate. They are usually named in the will, where one exists. If no will exists, they are usually the deceased person s next of kin. What does an executor do? An executor is appointed by the deceased person's will to administer their deceased estate in accordance with their will. The Supreme Court can also appoint an administrator to deal with the deceased estate for example, where there is no valid will or the person nominated to be executor cannot discharge their duties. The executor, in effect, steps into the shoes of the deceased person and winds up the deceased person's personal affairs. Some other tasks usually performed by an executor include:
2 Page 2 of 13 locating the will arranging the funeral applying for probate obtaining a death certificate informing investment bodies of the death informing Centrelink locating and assessing the value of assets paying debts, income tax and funeral expenses transferring assets and paying stamp duty, and distributing the surplus to beneficiaries. Appendix A provides an illustration of the different stages of administration of a deceased estate. What forms part of a deceased estate? Assets owned by the deceased person form part of the deceased estate. For example, real estate, money in bank accounts, shares, and personal chattels. Some types of income will also form part of the deceased estate. Some assets will not be included in the deceased estate because the deceased person has made other arrangements to distribute those assets. Superannuation and life insurance payments Superannuation and life insurance payments may or may not form part of the deceased estate. If there are stipulated beneficiaries under the policies, the payments may go directly to the beneficiaries without going through the deceased estate. Jointly owned assets Assets that are jointly owned may or may not form part of the deceased estate. This will depend on the type of coownership. There are two categories of co-ownership: joint tenancy, and tenancy-in-common. When a joint tenant dies, their share in the asset is extinguished and they cannot pass the asset to their estate. The surviving owner becomes the sole owner. The most common type of asset held in joint tenancy is the family home. When a tenant-in-common dies, their share passes to their deceased estate. Hence, the executor can deal with that share in the asset. In the case of real estate, the title deed usually specifies the type of co-ownership. Under common law, joint tenancy of real estate is presumed in the absence of contrary intention. For other assets like bank accounts and shares, the type of ownership is often not stipulated. The contract or purchase documentation may provide clues. What is a will? A will is a legal document that sets out directions for the administration and disposal of your property after your death. What is probate? Where the deceased person leaves a will, the executor needs to obtain probate before they can distribute the assets of the deceased estate to the beneficiaries. Probate is granted by the Supreme Court in the state or territory in which the will is lodged. Probate is the Supreme Court's authority to the executor to administer the deceased estate. People who believe they have an entitlement to part of the deceased estate or creditors of the deceased person (for example, the Tax Office if there is an outstanding tax liability), can contest the will before probate. What happens if the deceased person did not have a valid will? If the deceased died without a valid will (intestate), letters of administration need to be obtained from the Supreme Court appointing someone to administer the deceased estate.
3 Page 3 of 13 In such situations, the assets of the deceased person are distributed in accordance with the succession laws of the states and territories of Australia. Generally, that means the estate passes to the deceased person s next of kin. What is a testamentary trust? A testamentary trust is a trust established by a will. It does not come into effect until after the death of the person making the will. At this point in time, specified deceased estate property is transferred to a trustee who holds the assets on trust for the benefit of the beneficiaries. A testamentary trust is not the same trust as the deceased estate. A testamentary trust may last for many years after the deceased estate has been fully administered. The information provided in this document is not appropriate for testamentary trusts. Tax obligations of executors Role of executor An executor has certain taxation responsibilities on behalf of the deceased person and the deceased estate. Some of the responsibilities include: notifying the Tax Office of the death, to stop the issue of any notices which may cause distress to partners or other relatives lodging prior year tax returns on behalf of the deceased person lodging a 'date of death' (final) personal tax return on behalf of the deceased person applying for a trust tax file number for the deceased estate if trust tax returns need to be lodged preparing and lodging trust tax returns for the deceased estate, if necessary making distributions to beneficiaries, and paying tax on behalf of certain beneficiaries. Any tax liability that may arise from your role as executor is separate from your own personal tax liability. You do not include any of the income of the deceased person or deceased estate in your own personal tax return, except for any trust income you received as a beneficiary. Authority to deal with the tax affairs of the deceased person For you to deal with the deceased person s tax affairs, you will need proof that you have the authority to do so. After you have been appointed executor, you should write to the Tax Office with details of the deceased person s: full name date of birth date of death address for services of notices, and tax file number, if known. You will need to provide proof of identity for yourself and documents such as the death certificate and the will or evidence of the grant of probate or letter of administration (when it is granted this may be some time after you lodge the deceased person's tax returns). The tax file number of the deceased person cannot be disclosed to you until you have established your authority. Once that is done, you can request the tax file number of the deceased person over the phone or have it sent to you. Tax return for the deceased person If the deceased person did not lodge prior year tax returns, you will need to determine whether they are necessary. If required, you need to prepare and lodge them. There may be a number of reasons why you may have to lodge a personal tax return for the deceased person. For example: tax has been withheld from the income earned by the deceased person
4 Page 4 of 13 the deceased person earned taxable income exceeding the tax-free threshold tax has been withheld from interest or dividends because no tax file number was quoted to the investment body, or the deceased had lodged returns in prior years. To determine if a final tax return for the deceased person is required, read Do I need to lodge a tax return? Final tax return not required for deceased person If you have determined that a final tax return is not required, please complete the Non-lodgment advice (NAT ) and send it into the Tax Office. On the form, where it asks for the reason, please print DECEASED followed by the date of death. Final personal tax return required for deceased person If the deceased person has been lodging tax returns prior to their death, you will need to submit a final tax return on behalf of the deceased person. This will be the final personal tax return of the deceased person with their personal tax file number. This tax return is known as the date of death return. That tax return should cover the period from the previous 1 July to the date of death. For example, if the date of death was 6 March 2007, the date of death tax return will cover the period 1 July 2006 to 6 March The final tax return should include all assessable income derived by the deceased person and all the tax-deductible expenses incurred up to the date of death. (Income derived after the date of death, and any deductible expenses incurred after the date of death, are included in the deceased estate's trust return.) Examples of assessable income include: salary or wages bank interest dividends from share investments trust distributions from managed investment funds rent from investment properties, and capital gains from the sale of assets. Examples of tax-deductible expenses include: work-related expenses like tools of trade, uniform or professional publications tax related expenses incurred by the executor in relation to the income tax affairs of the deceased person ongoing management fees paid to investment advisers bank charges, and rental expenses in relation to an investment property. Gifts made under a will are not tax deductible unless the gift is made under the cultural bequest program. In such instances, the deduction is allowable in the date of death tax return of the deceased person. A claim for medical expenses tax offset may be made in relation to net medical expenses incurred by the deceased person. This includes the amounts incurred by the deceased person but paid by you, as the executor of the deceased estate. Funeral expenses are not tax deductible nor are they eligible for the medical expense tax offset. Losses If the deceased person has accumulated losses at the date of death, those losses can be offset against income in the final tax return (capital losses may be offset against capital gains), but cannot be carried forward into the deceased estate. Ordinary losses as well as capital losses that cannot be offset in the final tax return for the deceased will lapse. Completing the tax return When preparing the final tax return for the deceased person, you need to: print the words DECEASED ESTATE on the top of page one of the tax return
5 Page 5 of 13 print X in the NO box at the question Will you need to lodge an Australian tax return in the future? sign the tax return on behalf of the deceased person. Note: When completing the Medicare levy questions: Question M1: If the deceased person (and any dependants) were fully exempt from the Medicare levy until their death, the number of days that they are exempt from the Medicare levy (Label V) in this return is 365. If the deceased person was half exempt from the Medicare levy until their death, the number of days that they are half exempt from the Medicare levy (Label W) in this return is 365. Question M2: If the deceased person (and any dependants) were covered by private hospital cover or were exempt from the Medicare levy until their death, the number of days that they do not have to pay the Medicare levy surcharge (Label A) in this return is 365. Any refunds from this final tax return will be sent to you as the executor. Similarly, any tax liabilities of the deceased person are to be paid by you out of the deceased estate. You need to withhold amounts from the assets or income of the deceased estate to pay this liability. Tax rates for final tax return of deceased person The general individual tax rates, with the full tax-free threshold, apply to the final tax return of the deceased person, if an Australian resident. The Medicare levy and Medicare levy surcharge may also be payable. Higher Education Contribution Scheme (HECS) debt and Student Financial Supplement Scheme (SFSS) The trustee or executor of a deceased person is required to lodge all outstanding tax returns up to the date of death of the person. If the deceased person had an accumulated HECS and/or SFSS debt at the time of their death, a compulsory HECS/SFSS repayment will be calculated. Compulsory repayments will be raised in the income tax notice of assessment when the minimum repayment thresholds are reached ($38,149 in 2007 for HECS debt and $38,149 in 2007 for SFSS debts). Any compulsory HECS and/or SFSS repayment included on an income tax notice of assessment which relates to the period before death must be paid by the deceased estate. The remainder of the accumulated HECS and/or SFSS debt is cancelled. For more information on HECS/SFSS and how compulsory repayments are calculated, read Repaying your HELP debt in , and/or Repaying your Financial Supplement loan How to get a tax return The individual tax return is part of TaxPack. Read TaxPack 2007 for information on how to obtain a copy. Tax clearance The Tax Office no longer issues letters of clearance, stating that income tax liabilities to the date of death have been satisfied. The notice of assessment in respect of the date of death return will constitute the formal notification where: all the liabilities on the notice have been satisfied, or the notice states that no tax is payable. Where the deceased person has not lodged a return for several years, the last notice of assessment will serve the same purpose. Taxation of the deceased estate After the date of death, the deceased estate may receive income from various sources (see Assessable income). A trust tax return will need to be lodged for the deceased estate if there is tax payable on the income or if tax has been withheld from that income.
6 Page 6 of 13 A trust tax return will need to be lodged each income year until the deceased estate is fully administered (that is, all of its assets and income are distributed to the beneficiaries) and no longer deriving income. The net income of the deceased estate is taxed either in the hands of: the beneficiaries who are presently entitled, or the executor. Assessable income Any income derived after the date of death belongs to the deceased estate. Income derived after death may include: salary and wages unpaid at the date of death bank interest eligible termination payments dividends from share investments trust distributions from managed investment funds investment income from a friendly society funeral policy taken out after 31 December 2002 (for more information, read Tax changes for friendly society funeral polices). rent from investment properties, and capital gains from the sale of assets. Amounts for annual and long service leave paid to the deceased person s beneficiaries or the executor are exempt from tax. Eligible termination payments (ETPs) Sometimes, you may receive a payment called a death benefit eligible termination payment. This payment may be paid by the deceased person s employer, superannuation fund, approved deposit fund or from a retirement savings account. This amount is tax-free when it is within the reasonable benefit limit (RBL), and passed on to the deceased person s dependants. In this context a dependant is someone who is financially dependent, but it will always include the spouse of the deceased. There are many special rules with for ETPs. For more help with such payments, phone If there are amounts of an ETP that are assessable, include them under Other income in the trust tax return. Tax-related expenses Expenses incurred by the deceased estate in earning assessable income may be tax deductible. For example: tax agent s fees ongoing management fees paid to investment advisers bank charges, and rental expenses for an investment property. Gifts made pursuant to a will are not tax deductible unless the gift is made under the cultural bequest program (in which case it must be included in the date of death return, not in the trust return). Losses If the deceased person has accumulated losses at the date of death, those losses cannot be carried forward into the deceased estate. Ordinary losses as well as capital losses will lapse at the time of death. Tax file number for the deceased estate A tax file number is required to lodge a deceased estate s tax return. You will need to complete an application form, Tax file number application or enquiry for a deceased estate, for a trust tax file number and provide certain proof of identity documents. This trust tax file number may be quoted to investment bodies where investments are still held by the deceased estate. It is not appropriate to quote your personal tax file number in the circumstances.
7 Page 7 of 13 Paying tax on the income of the deceased estate There are many factors that will determine who pays the tax on the income derived by the deceased estate and the applicable tax rate. They include whether the beneficiaries are presently entitled, whether they are under a legal disability and whether the deceased estate is fully administered. A summary of the different tax situations is provided in Appendix B. While the deceased estate is under your administration, you will need to determine whether the beneficiaries are presently entitled and under any legal disability at the end of each financial year (30 June). This will determine who is liable to pay tax on the income of the deceased estate. As executor, you cannot distribute the income or assets of a deceased estate until the debts of the deceased person, including tax liabilities, are determined and probate has been granted. You can distribute some of the income or assets to beneficiaries if you are certain that the remainder of the deceased estate is sufficient to cover any outstanding liabilities. Meaning of present entitlement Beneficiaries are presently entitled to the income of a deceased estate if they have an indefeasible, absolutely vested interest in the income. In other words, the beneficiaries have a claim or interest in the income that cannot be defeated by another person. They must also be able to demand immediate payment of the income. This means that beneficiaries can be presently entitled even though they may not have actually received an income distribution. Generally, beneficiaries are not presently entitled to the income of a deceased estate during the administration of the estate. This is because the debtors of the deceased person and any persons contesting the will may be able to defeat the beneficiary's right to the income. This means that during this period, the income belongs to the deceased estate and not the beneficiaries. However, as administration progresses, it may become clear to you that part of the net income of the deceased estate will not be required to either pay or provide for debts. You may exercise your discretion and pay some of the income to the beneficiaries. The beneficiaries in this situation will be presently entitled to the income actually paid to them or actually paid to someone else on their behalf. Beneficiaries can be presently entitled if, under the terms of the will, money (income of the deceased estate) is applied for their benefit and not paid directly to them. An example is the payment of the beneficiary s rent. No beneficiary is presently entitled to any income accrued by the deceased person at the date of death but only received after death. Meaning of legal disability People are considered to be under a legal disability if they cannot give a valid discharge for money paid to them. Beneficiaries are under a legal disability if they are either: minors (that is, under 18 years of age as at 30 June) bankrupt, or declared legally incapable because of a mental condition. When this group of persons become presently entitled to income of the deceased estate, you as executor will be assessed on their behalf. The income year in which the deceased estate is fully administered The net income of the deceased estate (and whether any beneficiary is presently entitled) is determined on the last day of each income year (30 June). This means that, on the last day of the income year, a beneficiary who is presently entitled will be assessed on their share of the net income for the whole of the income year. However, in the income year in which the deceased estate is fully administered, the Tax Office will accept an apportionment of the net income received. Where the executors and beneficiaries are able to demonstrate, through proper accounts at the completion of administration, the actual amounts of income derived in the periods before and after the day on which the estate was fully administered, an apportionment may be made as follows:
8 Page 8 of 13 Income derived in the period between... is assessed... the beginning of the income year and the day administration in your hands as the executor. was complete the day administration was complete and the end of the income year to the beneficiaries who are presently entitled. Where beneficiaries are under a legal disability, you as executor will be assessed on their behalf. For such an apportionment to take place: there must be evidence of the income derived during these periods, and you (as the executor), or the beneficiaries, must request it. The Tax Office does not accept an apportionment into the two periods merely on a time basis. One exception is when you (as executor) pay part of the income of the deceased estate to a beneficiary before the estate is fully administered. In such an instance, the beneficiary would be assessed on the basis that they were presently entitled to that income. Lodging the deceased estate s trust tax return After you have determined whether the beneficiaries are presently entitled and whether they are under any legal disability at the end of the financial year, you are then required to lodge a trust tax return for the deceased estate (if you are liable to pay tax for the deceased estate). If the deceased estate is paying tax on franked dividends, the imputation credits need to be claimed back through this trust tax return. You will need a copy of a Trust tax return 2007 and the accompanying Partnership and trust tax returns instructions Special instructions for executors of deceased estates are contained in the guide. If you need assistance with completing the trust tax return for the deceased estate, phone us on Tax rates for the deceased estate Tax rates beneficiary not presently entitled To the extent beneficiaries are not presently entitled to the net income of the deceased estate, the tax liability will rest with the deceased estate. First three income years For the first three tax returns, the deceased estate income to which no beneficiary is presently entitled is taxed at the general individual rates, with the benefit of the full tax-free threshold. No Medicare levy is payable. Read Individual income tax rates. Example The deceased passed away on 5 April The first tax year for the deceased estate will cover the period 6 April 2005 to 30 June The second tax year will be from 1 July 2005 to 30 June The third tax year will be from 1 July 2006 to 30 June If the deceased estate earned taxable income of $6,000 or less during those first three tax returns, there is no tax payable.
9 Page 9 of 13 This concessional period of three tax years at the general individual rates, with the benefit of the full tax-free threshold, cannot be extended. If the administration of the deceased estate is completed in the same income year as the date of death, you do not need to lodge a trust tax return for the deceased estate if: no beneficiary is presently entitled to any of the income of the deceased estate (they may receive assets only), and the taxable income of the estate is below the tax-free threshold of $6,000 (for the 2007 income year). Fourth income year and later For deceased estates with prolonged administration that extend beyond the concessionally taxed period, there are special progressive trust tax rates that will apply. Example The deceased passed away on 5 April The first tax year for the deceased estate will cover the period 6 April 2004 to 30 June The second tax year will be from 1 July 2004 to 30 June The third tax year will be from 1 July 2005 to 30 June The fourth tax year will be from 1 July 2006 to 30 June It is from the fourth tax year that the special progressive tax rates will apply. For the 2007 income year, the special progressive tax rates are: Deceased estate taxable income (no present entitlement) $0 - $416 Nil Tax rates $417 - $594 50% of the excess over $416 $595 - $25,000 $89 plus 15% of the excess over $594 $25,001 - $75,000 $3,750 plus 30% of the excess over $25,000 $75,001 - $150,000 $18,750 plus 40% of the excess over $75,000 $150,001 and over $48,750 plus 45% of the excess over $150,000 No Medicare levy is payable. Tax rates beneficiary presently entitled and not under a legal disability If the beneficiary is presently entitled and not under a legal disability, they are liable for tax. For example, if you make an income distribution to an adult resident beneficiary, it is the responsibility of that person to declare the amount in their personal tax return and pay income tax on it at their marginal tax rate. Tax rates - beneficiary presently entitled but under a legal disability If the beneficiary is presently entitled, but under a legal disability, you will be liable to pay tax on their behalf. You will be assessed separately for each beneficiary in this category. The general individual tax rates apply. These rates are set out in Individual income tax rates.
10 Page 10 of 13 Normally, unearned income of minors is subject to tax at higher rates and a lower tax-free threshold. However, for distributions from a deceased estate, the ordinary tax rates apply. Medicare levy Medicare levy and Medicare levy surcharge are also payable in the same way as if the income was assessed to the beneficiary. For more information, read What is the Medicare levy? Tax offsets You are also entitled to tax offsets to which the beneficiary would be entitled for example, the dependent spouse, medical expenses and 30% private health insurance tax offsets. The low income tax offset is automatically calculated if the income is below the relevant threshold. You will need to include a statement with the tax return showing the type and amounts of tax offsets claimed. Tax rates non-resident beneficiary If the beneficiary is a non-resident of Australia for taxation purposes, you are liable to pay tax on the beneficiary s share of the trust income distributed. The non-resident tax rates apply. These are set out in Individual income tax rates. No Medicare levy is payable. Interest and dividends are not included in the non-resident beneficiary's trust income. Instead, these are taxed by having a non-resident withholding tax withheld and paid to the Tax Office. The withholding tax rate varies for different countries and between interest and dividends. Fully franked dividends are not subject to withholding tax. To find the appropriate withholding rate, phone us on Information for beneficiary Beneficiaries who are presently entitled may need to lodge personal tax returns and disclose their trust distributions. Accordingly, they need to know certain information about their entitlement. All beneficiaries who are presently entitled should be provided with the following information: their share of trust income that they were presently entitled to the amount of their entitlement that was applied for their benefit the amount that is assessable to them, and their share of imputation credits associated with any dividends that may be in the trust distribution. Beneficiaries presently entitled but under a legal disability also need to know the amount of tax you have paid on their behalf. They are entitled to receive a tax credit for this tax so that the same amount will not be taxed twice. Non-resident beneficiaries will also need to know: the amount of interest in their distribution and the withholding tax paid the amount of unfranked dividends in their distribution and the withholding tax paid the amount of franked dividends in their distribution, and the amount of tax you have paid on their behalf. Tax obligations of beneficiaries A beneficiary is a person who receives all or part of the deceased estate. If a will exists, it usually sets out how the deceased estate and income should be dealt with. There may be some tax obligations for beneficiaries, depending on the nature of any distribution they may receive. As the executor, you should provide details of trust distributions to the beneficiaries. Corpus distribution If the trust distribution represents corpus of the deceased estate, no tax is payable by the deceased estate or the
11 Page 11 of 13 beneficiary. Corpus is the capital amount or income that has already been subject to tax to the deceased estate for example, the capital sums in a bank account. If the distribution takes the form of a transfer of asset, there may be capital gains tax consequences to the beneficiary. Income distribution If the trust distribution consists of income of the deceased estate, the tax implications to the beneficiaries depend on whether they are presently entitled to the income. If the estate income is applied on behalf of the beneficiaries, they are considered to be presently entitled to the amount, even though they did not receive any money in their hands. An example is the payment of the beneficiary s rent. Presently entitled and under no legal disability Australian resident beneficiaries who are presently entitled and not under any legal disability, will be personally liable to pay tax on the income distribution. They will need to disclose that income distribution from the deceased estate in their personal tax return and pay tax at the general individual tax rates. The income will be assessable in the year the present entitlement arose, not in the year the amount is received. For example, if a beneficiary was presently entitled to the deceased estate income on 30 June 2007, they are personally assessable on that amount in the year ended 30 June 2007, even though the amount may be received after that date in the following tax year. Presently entitled and under legal disability For those beneficiaries who are presently entitled but under a legal disability (for example, under 18 years old), you as executor of the deceased estate should have paid tax on their behalf in respect of the income distribution. If that income distribution from the deceased estate is their only source of income for the year, they do not need to lodge a personal tax return. If the beneficiaries have other income, they need to lodge a personal tax return that includes the income distribution from the deceased estate. However, they will be entitled to a credit for the tax paid or payable by you on their behalf. Overseas deceased estate For Australian resident beneficiaries, the rules are the same, regardless of whether the deceased estate is in Australia or overseas. Where the income distribution from an overseas deceased estate has been subject to foreign tax, they may be entitled to a foreign tax credit. (Read How to claim a foreign tax credit (NAT ).) Franked dividends If some of the income distribution from the deceased estate consists of franked dividends (that is, the company paying the dividends has paid income tax in respect of the amount), resident beneficiaries are also entitled to the associated franking credit when the income distribution is disclosed in their personal tax returns. That is why you need to inform them of their share of any franking credits associated with the franked dividends. To find more information about the dividend imputation system, read Refunding franking credits individuals. Capital gains tax When you transfer or sell assets of the deceased estate, there may be capital gains tax consequences. There are special capital gains tax rules regarding such assets. For more information, read Deceased estate and capital gains tax.
12 Page 12 of 13 Checklist To fully meet the taxation obligations, you may need the following from the Tax Office: tax file number of the deceased person Non-lodgment advice (NAT ) TaxPack 2007 (including the personal tax returns) Tax file number application or enquiry for a deceased estate Trust tax return 2007 Partnership and trust tax returns instructions 2007 Guide to capital gains tax (NAT ) Guide to capital gains tax concessions for small business Taxation Ruling IT 2622: Present entitlement during the stages of administration of deceased estates Do you need to know more? For more information about deceased estates, you can: phone us on , or seek advice from a professional adviser. Appendix A - stages of administration of a deceased estate The period of administration begins at the date of death and ends when the administration of the estate is complete. Date of death Stages of administration Period of administration 1. Burial of deceased person 2. Executor appointed by will or administrator appointed by Court 3. Probate applied for and granted by Court 4. Assets vested in executor who administers estate date of death and trust tax return lodged initial stage net income of estate is applied to reduce debts (including tax liabilities) etc intermediate stage part of the net income of estate that is not required to pay debts etc may be paid to beneficiaries final stage debts etc are paid or provided for in full and net income and assets of the estate are distributed to beneficiaries. Administration of estate is complete Appendix B - a summary of how deceased estate income is taxed in relation to Australian resident beneficiaries If the income is an amount to which... then... the income is assessed... the tax rates which apply.. a beneficiary is presently entitled determine whether or not the beneficiary is under a legal liability if the beneficiary is under a legal liability to the executor on behalf of the beneficiary general income tax rates apply if the beneficiary is not under a legal liability to the beneficiary on their personal income tax return the executor is assessed on the income the beneficiary s marginal tax rates will apply no beneficiary is presently entitled concessional tax rates apply for the first three tax returns of the deceased estate. Last Modified: Wednesday, 6 June 2007
13 Page 13 of 13 Copyright Commonwealth of Australia This work is copyright. You may download, display, print and reproduce this material in unaltered form only (retaining this notice) for your personal, non-commercial use or use within your organisation. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. Requests for further authorisation should be directed to the Commonwealth Copyright Administration, Copyright Law Branch, Attorney-General s Department, Robert Garran Offices, National Circuit, BARTON ACT 2600 or posted at
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Helping you get things in order Releasing funds and closing accounts for loved ones that have passed away We re here to help If you ve recently lost a family member or friend, we understand that this is
SALARY PACKAGING SUPERANNUATION GUIDE TO EMPLOYEES Superannuation Introducing Salary Packaging Salary packaging has been made available to all staff of the University through the Enterprise Agreement process.
Guide for small business operators Advanced guide to capital gains tax concessions for small business 2013 14 For more information visit ato.gov.au NAT 3359 06.2014 OUR COMMITMENT TO YOU We are committed
Summary - Table for Appropriate Structure Sole Investor Partnership Private Company Unit Trust Discretionary Trust Superannuation Fund Administered by Individual Partners Directors Trustee Trustee Trustee
A short guide to Probate 1 2 Private Client This booklet provides guidance to those who are to deal with the estate of someone who has died, and to those who stand to inherit. Private Client Private Client
Fact Sheet Super taxes, caps, payments, thresholds and rebates This fact sheet provides a useful one-stop reference guide to the tax rates, caps, thresholds and rebates that apply or are related to superannuation
Version 4.2 This document provides some additional information to help you understand the financial planning concepts discussed in the SOA in relation to. Important information This document has been published
Publication 603 (3/00) New York State Department of Taxation and Finance Estate Tax Waivers Note: An estate tax waiver is not required for the estate of an individual whose date of death is on or after
Year-end Tax Planning Guide - 30 The end of the financial year is fast approaching. In the lead up to 30 June, this newsletter covers some of the year-end tax planning matters for your consideration. BUSINESSES
business PAyers tax table NAT 3479-05.2006 SEGMENT AUDIENCE FORMAT PRODUCT ID SChedule 20 pay as you go (PAYG) withholding Quarterly tax table Incorporating Medicare levy with and without leave loading.
TB 33 Investment bonds Issued on 1 July 2013. Summary There are a wide range of investments to choose from in today s market. One option is an investment bond which is a life insurance policy purchased
Self managed superannuation funds A Financial Planning Technical Guide 2 Self managed superannuation funds What is a self managed 4 superannuation fund (SMSF)? What are the benefits? 4 What are the risks?
Self Managed Superannuation Funds A Financial Planning Technical Guide Securitor Financial Group Limited ABN 48 009 189 495 AFSL 240687 Contents What is a self managed superannuation fund (SMSF)? 1 What
ASPECTS OF FINANCIAL PLANNING Use of trusts in The incorporation of a trust structure into one s financial and estate planning may have merit in certain circumstances. This article provides a brief outline
Structuring & Tax Ensuring your plans for your super become a reality By Ben Andreou Partner Head of Structuring & Tax December 2015 Table of Contents Page Why should you read this paper?... 3 Background...
Adviser Services trust overview long form OVERVIEW Set out in this document is a summary of the unit trust structure ( Trust). A general discretionary trust creates an equitable obligation binding a person,
Defence Bank Pension Pension Tax File Number Declaration < Instructions This declaration is NOT an application for a tax file number. Please print neatly in BLOCK LETTERS and use a BLACK pen. Print X in
Changes to private health insurance rebate and Medicare levy surcharge Introduction For an explanation of terms used, see Definitions. From 1 July 2012, the private health insurance rebate and the Medicare
Guide to Executorship and Probate NSW Trustee & Guardian provides professional and independent executor services to the people of NSW. Contents Introduction 3 What does it mean to be appointed an executor?
Tax deductible superannuation contributions TB 35 TECHNICAL SERVICES ISSUED ON 29 OCTOBER 2014 ADVISER USE ONLY VERSION 1.1 Summary Employers and certain individuals can claim a tax deduction for contributions
Estate Planning Fact Finder A person's last actions require careful thought and planning. That thought and planning then requires proper implementation through a carefully drafted Will and Power of Attorney
Member guide. Superannuation and Personal Super Plan Product Disclosure Statement The information in this document forms part of the Hostplus Product Disclosure Statement issued Section 7. How super is
instructions and form for taxpayers Individuals Tax file number declaration The information you provide in this declaration will enable your payer to work out how much tax to withhold from payments made
ANZ OneAnswer Investment Portfolio Incorporated Material 5 May 2008 How do I read this Incorporated Material? This Incorporated Material provides further information and/or specific terms and conditions
WHAT YOU NEED TO KNOW ABOUT SETTLING AN ESTATE A handy guide to the steps necessary to settle an estate in Maryland. WHAT YOU NEED TO KNOW ABOUT SETTLING AN ESTATE This publication provides general information
BUY-SELL AGREEMENTS CORPORATE-OWNED LIFE INSURANCE This issue of the Legal Business Report provides current information to the clients of Alpert Law Firm on important tax changes regarding the stop-loss
I loved reading the terms & conditions! said no one, ever term deposit terms + conditions index. Part a - general terms and conditions. 2 1 Purpose of this booklet. 2 2 Meaning of words used. 2 3 Opening
ASPECTS OF FINANCIAL PLANNING Taxation implications of More and more of our clients are being given the opportunity to live and work overseas. Before you make the move, it is worthwhile considering the
We are here to help. A guide to finalising deceased accounts. Help at a difficult time. This guide is designed to help you cope with some of the administrative tasks that come with the loss of a family
INTRODUCTION TO CAPITAL GAINS TAX Ross Fiddes Consultant Whitelaw McDonald OVERVIEW For capital gains tax to apply in Australia, a CGT Event must happen to a CGT assessable Asset. The most common event
This section summarises the main Federal Government taxes that apply to superannuation at the time of preparation. For more information, contact MyLife MySuper on 1300 MYLIFE (695 433) or the Australian
Instructions for taxpayers Individual tax return instructions 03 To help you complete your tax return July 0 30 June 03 Now available on tablets NAT 7050-06.03 OUR COMMITMENT TO YOU We are committed to
Protocol Annex 4 STANDARD CONDITIONS FOR INDIVIDUAL VOLUNTARY ARRANGEMENTS Produced by the IVA FORUM Revised January 25 th 2008 TABLE OF CONTENTS FOR STANDARD CONDITIONS PART I: INTERPRETATION Page 1 Definitions
ATHANS&TAYLOR Chartered Accountants 2015 TAX RETURN CHECKLIST With the end of financial year fast approaching, we have compiled a checklist regarding income expenses that need to be on hand for the preparation
IR 288 June 2012 Trusts and estates income tax rules Types of trusts and how they re taxed 2 TRUSTS AND ESTATES www.ird.govt.nz Go to our website for information, services and tools. Secure online services
Schedule 30 Pay as you go (PAYG) withholding NAT 3348 Tax table for back payments Including lump sum payments in arrears. FOR PAYMENTS MADE ON OR AFTER 1 JULY 2010. This document is a withholding schedule
Booklet 4 Super and estate planning MAStech Smart technical solutions made simple Contents Introduction 01 Introduction 03 Making a start 04 What happens to your superannuation benefits after your death?
CSF27 04/12 Tax and your CSS benefit Who should read this? All contributing CSS members. What is in this fact sheet? > > What should I know up front? > > My benefits in the CSS > > How are contributions
Smart strategies for reducing aged care costs 2012/13 Get the care you need at a lower cost Aged care costs can be very high and could increase as our population ages. The accommodation bond alone averages
A BEGINNERS GUIDE TO ESTATE PLANNING What is Estate Planning? This can be described as a planning strategy aimed at giving: a) financial security for a person during their lifetime, including an ability
What is Probate?...2 When to Probate...2 Executors Duties / Liabilities...2 Locate and Read the Will...2 Obtain the Death Certificate...3 Make Funeral Arrangements...3 Arrange Immediate Funds for Survivors...3
PUBLIC TRUSTEE SCALE OF FEES COMMENCING 1 JULY 2015 1 CHAPTER A PRELIMINARY PART 1 GENERAL 1. This Scale of Fees commences operation on 1 July 2015. 2. The Dictionary in Schedule 1 defines words and phrases
CHEQUE ACCOUNT For completion by Anglican parishes or organisations Please complete, detach and forward the Cheque Account form to: The Anglican Savings and Development Fund PO Box 817 NEWCASTLE NSW 2300
How super is taxed guide (AP.4) Issued 1 January 2016 The information in this document forms part of the ESSSuper Accumulation Plan Product Disclosure Statement dated 1 January 2016. Contents Providing
The Expatriate Financial Guide to Australian Tax Facts Australia Introduction Tax Year Assessment Basis Income Tax Taxation in Australia is mostly at a national/federal level with property taxes (council
Taxpayers Australia Inc Superannuation Australia (A wholly owned subsidiary of Taxpayers Australia Inc) Glossary of superannuation terms These terms are commonly used in the superannuation sector. Account-based
Personal Trusts Established by Deed in Australia Personal trusts can be mandatory or optional, fixed or non-fixed, flexible or protective and can have beneficiaries or unitholders: Absolute entitlement
PLANNING FOR A DISABLED BENEFICIARY REFERENCE GUIDE This Reference Guide is intended to provide information and guidance for those whose estate planning objectives include providing for an individual who
NOT FOR SALE Income Deductions Losses Tax offsets Private health insurance CHOOSE E-TAX AND LODGE OVER THE INTERNET. see page 6 YOU MAY ALSO NEED SUPPLEMENT. see page 5 LODGE YOUR TAX RETURN BY 31 OCTOBER
Superannuation Technical Information Booklet Macquarie Wrap Document number MAQST02 The information contained in this Technical Information Booklet should be read in conjunction with the relevant Product
FREQUENTLY ASKED QUESTIONS REGARDING WILLS, DECEASED ESTATES AND TRUSTS Q: What will happen if I die without having made a will? There are laws which determine who will inherit if a person dies intestate,
Death, Estates & Relationship Property Issues Prepared & Presented by nsatax Limited Disclaimer This Seminar is of a general nature only. Please obtain specific advice on client situations as minor changes
Guide for notice of intent to claim a tax deduction for personal super contributions 2014/2015 Under section 290-170 of the Income Tax Assessment Act 1997 Need Help? For more information about your eligibility
Superannuation and Residency Fact Sheet - October 2014 A change in residence has significant implications for superannuation. A number of issues arise when an individual relocates overseas whether temporarily
Lump sum benefit payment request for your superannuation or account based pension How to claim a benefit To claim a benefit you will need to complete the attached Benefit Payment Request and send it direct