ATO Deceased Estate Tax Return for an Executor

A deceased estate tax return separates the deceased person’s final individual return from income the estate earns after death. Before lodging either, confirm the executor’s authority and obtain a new appointment to act. The deceased client’s previous authority ends at death.

Executor of a Deceased Estate: Who You Now Act for

Your client for the estate engagement is the executor or administrator in that capacity. The executor is named in the will. A court appoints an administrator when there is no executor able to act, including where there is no will.

The deceased estate is the deceased person’s assets and liabilities being administered after death. For income tax reporting, the estate is treated as a trust when an estate return is required. Keep its file distinct from the deceased individual’s file.

Collect the executor’s identity evidence, current contact details and the will. Request the death certificate and any court grant already issued. Record every executor or administrator, including anyone who lives overseas.

A long-standing relationship with the deceased does not carry the engagement forward. Obtain fresh instructions and authority from the person managing the estate. The ATO’s representation guidance explains why former representatives must be reappointed.

Confirming the Executor’s Authority Before You Act

Confirm who is entitled to administer the estate before releasing the deceased client’s records or lodging a return. Being a spouse, child or beneficiary does not itself establish authority to instruct your practice.

Keep a certified copy of the grant of probate or letters of administration once issued. The grant is the court’s confirmation of the executor’s or administrator’s authority. Our grant of probate guide explains the grant and the relevant state court.

Distinguish the executor named in a will from an authorised legal personal representative (LPR) on ATO records. The ATO requires an Australian court grant, or an overseas grant resealed in Australia, for unrestricted access. A will alone does not give that access.

Some small estates proceed without a grant. The ATO can help the person managing such an estate within its disclosure rules, but cannot record that person as an authorised LPR. Document the basis for the work you can undertake and the information you can lawfully release.

Record who gave each instruction and their capacity. If executors disagree about a sale or distribution, obtain agreed instructions or refer the dispute for legal advice before acting on it.

ATO Deceased Estate Steps: Notifying the Death and Linking the Estate

Notify the ATO of the death and the LPR’s appointment before trying to restore agent access. The ATO removes former representatives’ access when it records the death.

Follow the ATO’s notification-by-mail procedure for tax agents.

1. Complete Notification of a deceased person, NAT 74279. Include the deceased person’s identifying details, date of death and last address known to the ATO.
2. Enter the LPR’s identity and contact details. Have the LPR sign the form.
3. Attach certified copies of the required supporting documents. A certified court grant establishes the LPR’s appointment and removes the need to attach a death certificate for this notification.
4. Attach authorisation of your appointment to act for the LPR on your practice’s letterhead. Mail the package to the address shown in the ATO procedure.
5. Retain copies and confirm that the ATO has recorded the LPR and your practice as authorised contacts before accessing protected records.

Where a grant is being sought, the ATO advises waiting for it before official notification to avoid processing delays. An executor can call to pause correspondence while the documents are being obtained. If the estate proceeds without a grant, use the required death certificate and will and record the restricted authority.

Once the authorised LPR appoints you, make the appointment declaration and add the deceased individual to your client list in Online services for agents. The ATO’s access guidance describes this declaration. Add the estate separately using its own TFN when that registration is issued and the appointment covers it.

Update the authorised postal address and refund bank details for each record you handle. Obtain the executor’s written instructions and confirm the estate account details independently before changing them. Check the individual and estate records separately so refunds and letters reach the authorised recipient.

Executors can call the ATO’s Individual enquiries line on 13 28 61. Registered agents use 13 72 86. These are the separate lines on the ATO contact page. For client-list administration, see our Online services for agents guide.

Deceased Estate TFN Application

A deceased estate needs its own trust TFN when it needs to lodge a trust tax return. This includes estate income that meets the lodgment rules, and voluntary returns to claim franking credits. The deceased individual’s TFN remains for their individual returns.

Use the ATO’s estate registration instructions.

1. Confirm your appointment by the LPR and whether the estate is continuing a business.
2. Prepare the deceased person’s full name, date of birth, date of death and TFN if available. Collect the estate’s address, contact details and the executor’s or trustee’s details.
3. Apply online through the Australian Business Register. For a non-business estate, select the TFN-only option. The paper alternative is TFN application for a deceased estate, NAT 3236.
4. If the estate continues the deceased person’s business, apply for its new ABN and trust TFN. Select the trust/deceased estate entity option. The deceased business’s existing ABN cannot be reused for the estate.
5. Record the issued estate TFN against the estate client. Check that the deceased individual’s TFN remains against the date of death return.

Incorrect allocation: putting post-death estate interest into a later individual return under the deceased person’s TFN. Correct allocation: assess that interest in the estate and apply the estate trust-return rules.

Date of Death Return and Later Estate Returns

The date of death return covers the start of the deceased person’s final income year through the date they died. Lodge it under their TFN when an individual return is required. Estate income after death belongs to a separate reporting period.

Check earlier years for outstanding returns or non-lodgment advice before treating the date of death return as the final individual obligation. Review the deceased person’s lodgment history and notices in the ATO record. The estate data package helps reconstruct missing information.

Mark the required individual return as final. If no date of death return is required, give the ATO the appropriate non-lodgment advice. The ATO’s final-return guidance sets out both routes.

For the first three income years, lodge an estate trust return if its net income exceeds the individual tax-free threshold. A return is also required where a beneficiary is presently entitled to estate income or a beneficiary is a foreign tax resident.

From the fourth income year, any estate income, including capital gains, triggers a trust return. Where the estate is finalised, advise the ATO that no further estate returns are required. Confirm that the final reporting period includes remaining income and relevant distributions.

How the Three-Year Concession Works

For qualifying deceased estate income assessed to the trustee, the first three income years use individual rates with the full tax-free threshold. Apply for the concession in the first estate return. Material changes to the estate’s circumstances can affect it.

The first year runs from the day after death to that income year’s end. The next two income years complete the concession. This can be less than 36 months, and the concession cannot be extended.

No Medicare levy applies to the estate, and it does not receive individual tax offsets such as the low-income tax offset. Beyond the third income year, the later estate rate schedule applies. Present entitlement and beneficiary circumstances require separate assessment.

For example, in a fictional estate, death occurs one month before the income year ends. That short period counts as the first income year. A practice that counts three full anniversaries would plan the concession incorrectly. Use the ATO’s deceased estate tax-rate guidance for the applicable treatment.

A will can also create a testamentary trust. Onboard its trustee and trust separately when assets transfer into that continuing arrangement. Our testamentary trust guide explains its registration and tax treatment.

Records and Estate Accounts to Collect From the Executor

Collect records that show what belonged to the deceased at death and what the estate receives afterwards. Ask for the following material.

• Bank statements covering the final individual reporting period and the balance at death.
• Deceased estate bank account statements from opening through administration.
• An asset list with ownership shares, acquisition records and values at death.
• Prior tax returns, assessments and details of outstanding lodgments.
• Shareholding records, dividend statements and sale or transfer documents.
• Super death benefit statements showing the recipient and taxable components.
• Claimed debts, creditor documents and evidence of payments made by the executor.

The executor’s estate accounts must distinguish pre-death income from estate income. Reconcile each bank receipt to its source and reporting period. A payment arriving after death can need investigation of when it was earned and the applicable tax rule.

For Westpac records, work through the authorised executor and Westpac’s estates team. Its deceased-estates procedure requires the physically signed notification form, supporting certified documents and identity evidence. Request statements for the specific accounts and periods once Westpac recognises the representative. Opening its estate trust account requires each executor or administrator to have a Westpac customer profile or attend a branch with ID.

For Computershare, obtain each holding’s securityholder reference number or holder identification number from the executor. Its Australian deceased estate document library separates transmission into executor names from transfer to beneficiaries or buyers. Request holding, dividend and historical transaction records through the authorised representative. Use its Request for Information Fee Schedule for historical payments or transactions. Retain the certified authority documents and applicable transfer or transmission forms with the records.

Use a structured executor form with a document upload beside each record request. Ask which accounts remain open and which statements are missing. Give each missing item an owner and a due date, then follow up the specific statement period required.

For a debt claim, record the creditor’s claimed amount, supporting agreement or invoice and the authorised person’s instructions. Refer disputed legal validity or inheritance litigation to the estate’s lawyer. Your tax file records the unresolved question and its effect on accounts or lodgments.

Who Pays Capital Gains Tax on a Deceased Estate’s Assets

Death and an ordinary transfer to an executor or beneficiary generally do not trigger a taxable capital gain. When the estate sells an asset, the estate reports any taxable gain. When a beneficiary later sells an inherited asset, the beneficiary reports it.

Division 128 of the income tax law sets the general death and transfer rules. Exceptions require assessment where an asset passes to a tax-exempt entity, a complying superannuation entity or a foreign resident.

For a foreign resident beneficiary, the death-time exception depends on the deceased’s residence, acquisition history and whether the asset is taxable Australian property. A foreign beneficiary alone does not establish a death-time CGT liability. Use the ATO’s inherited-asset guidance to assess the exception.

Record each asset’s acquisition date, the deceased person’s cost base and its market value at death where required. Death does not reset every asset’s cost base to market value. For tenants in common, identify the deceased person’s ownership share instead of treating the whole property as an estate asset. Keep overseas share records and sale proceeds for separate tax assessment.

The Inherited Home’s Two-Year Rule

A qualifying inherited dwelling can be fully exempt where disposal settles within two years of death. Signing the sale contract within two years is insufficient if settlement falls outside it.

Eligibility also depends on acquisition history, the deceased’s main residence and income-producing use, and foreign-resident rules. The two-year period does not make every inherited investment property exempt. The ATO’s inherited-property guide explains those conditions and other qualifying occupancy routes.

Keep purchase and ownership records, evidence of occupation and rental use, residence history and the settlement statement. If disposal will be late, document the reason and consider the ATO’s extension conditions before lodging. Rental history, foreign residence or an ineligible dwelling needs a separate CGT assessment. Keep detailed calculations in the asset working papers.

Engagement Letter and Identity Checks for an Executor

Issue a new engagement letter naming the executor or administrator in that capacity and identifying the deceased individual and estate work covered. State that fees are payable from estate funds under the agreed terms. Define completion as lodgment of the final agreed return, with additional work requiring a further agreement.

Verify the executor’s identity as a new client and record the will or court grant relied on for authority. Use the practice’s verify a new client’s identity. A familiar surname or an existing family relationship does not replace that check.

Where there are several executors, agree how they will give instructions. The engagement letter must identify who can instruct you and how joint approval is recorded. Include responsibility for supplying documents and approving returns. Our accountant engagement letter guide covers the wider terms.

Before the first lodgment, confirm that the signed engagement matches the authorised person, the ATO appointment is recorded and each return uses the correct TFN. Keep an unresolved-item list for missing asset records or legal questions so the executor knows what must be supplied next.