It’s important for executors and administrators to understand the tax liabilities of the deceased as these must be paid before the residue of the estate is distributed to beneficiaries.

You can contact the ATO on 13 28 61 to determine when the last tax return was lodged.

If you establish previous tax returns were not completed and the deceased earned income from a salary, investments returns on shares or earned money after selling an asset over the tax-free threshold as executor or administrator you will need to prepare and lodge outstanding returns.

Once you have established all individual tax returns have been completed and taxes have been paid you need to complete a ‘date of death tax return’.

If the deceased earned income from a salary, investments, returns on shares or earned money after selling an asset over the tax-free threshold you will need to prepare and submit a final tax return on behalf of the deceased person for the financial year in which the person passed away.

If you establish a ‘date of death tax return’ is not due you should complete a non-lodgement advice form.

You can find more information about date of death tax returns on the ATO website.

If capital gains were generated from the sale of assets or income generated while the deceased estate is being administered a deceased estate tax return must be submitted for all financial years until the estate is finalised.

You will be required to submit a tax return if the estate income is over the tax-free threshold from any of the following:

• interest on ‘estate of late’ bank accounts
• investment returns such as dividends on shares
• income from an investment property or letting the deceased person’s home
• income from a trust as a beneficiary
• income from capital gains after the sale of an appreciating asset
• income from dividends
• money from a business
• any other form of income as defined by the ATO