The passing of a loved one is always difficult, however some family members and friends find finalising the Estate even harder. As this involves dividing the assets and selling their home, it tends to be a very emotional process.
What needs to be done?
Upon the passing of a loved one, there are certain agencies which need to be notified. Whether this is by yourself or a solicitor or tax agent you have engaged to act on your behalf.
Once the ATO have been notified, your tax agent may need to lodge the following:
- Lodge a final tax return for individuals (called a 'date of death tax return') on behalf of the deceased person or advise that a tax return is not necessary
- Lodge prior year tax return for individuals for the deceased person
- Lodge a trust tax return for the estate
There is no difference in the preparation of an individual tax return if the party is deceased. It is prepared and assessed in the same manner as if they were alive.
Implications for beneficiaries
There may be some tax obligations for a beneficiary if they:
- Receive super benefits
- Receive assets
- Earn income from the Estate
If you are in this position- you will need to declare to the ATO the share you received from the Estate.
Where there is a business involved
If the deceased person is a partner within a business (an association of people who carry on a business and distribute income or losses between themselves), on their death the partnership is dissolved.
As a leading provider in the ever-evolving niche of Estate taxation, Pender Accounting Group is uniquely positioned to deliver specialised advice in this area. Pender Accounting Group can minimise the potential for reduction in Estate assets, reduce delays in beneficiary payments and provide peace of mind to Executors of deceased Estates and trusts. Get in touch to find out more.