What Happens to Tax Returns After Death in Australia?

When a loved one passes away, their financial commitments—taxes included—don’t simply disappear. In Australia, tax law requires that the deceased’s matters be diligently brought to closure, such as lodging any outstanding returns. These include both the final tax return for deceased person and, if required, a deceased estate tax return.

Whether you have a simple estate or a complicated estate with continuing income, the guide makes each tax return after death in Australia simple to file and follow.

What Is a Deceased Estate Tax Return?

A tax return for a deceased estate is a tax return lodged on behalf of the deceased person. It can be one or more returns, i.e.:

The last person’s tax return (also referred to as the Date of Death tax return)
The estate tax return Australia, which includes income that accrues from the deceased’s estate from the date of death and beyond

The last tax return for a deceased individual includes all income the deceased had gained from 1 July until the day of their death, and the estate return includes such income as rent, dividends, or interest accruing to the estate.

These are statutorily required and dealt with by the ATO deceased estate division so that all matters of tax are resolved in proper order before the estate is dispersed among beneficiaries.

Who Is Responsible for a Deceased Person’s Tax Affairs?

The duty of dealing with the tax affairs of the deceased is that of the legal personal representative (LPR). This would be the executor under the will or an administrator appointed by the court in the absence of a will.

The legal personal representative ATO guidelines state that the LPR must:

• Notify the ATO of the death
• Retain financial records and lodge necessary tax returns
• Pay any tax debts due or obtain refunds
• Implement the continuous taxation of the estate of the deceased, if necessary

In certain circumstances, particularly in cases of significant assets or complexity, it is recommended to utilise the services of a Deceased Estate Accountant Perth to avoid non-compliance and mistakes.

How to Lodge a Deceased Person’s Tax Return?

Tax return after death involves a few structured steps. Here is the step-by-step process:

Step 1: Alert the ATO

The first step for lodging a deceased person’s tax return is to inform the ATO of the person’s death. This will be done by posting a Notification of a Deceased Person form, along with a certified copy of the death certificate and evidence of your entitlement to act (e.g., will, probate and tax return).

Step 2: Determine If a Final Return Is Required

Not all deceased persons require the terminal tax return. If the deceased person received no income for the income year, you can lodge a “Non-lodgment advice” instead. The majority of deceased persons will need a Date of Death tax return to account for income that was received up until the time of death.

Step 3: Gather Information and Documents

You’ll need:

• The individual’s TFN (tax file number)
• Bank and super statements
• PAYG summaries
• Investment income details
• Deductions or expenses the person was eligible to claim

Step 4: Lodge the Final Individual Tax Return

The final individual tax return is similar to a regular tax return but must be marked as “Final”. This can be lodged using myGov (if previously linked) or through a registered Tax return accountant.

Step 5: Lodge Estate Tax Returns

If the estate generates income post-death (e.g., rent, interest), one must make a deceased estate tax return. The estate may also need another TFN. You can even seek a tax-free threshold in certain situations.

Step 6: Finalize Tax Refunds or Obligations

Once the ATO has processed the return, it will send either a refund or a debt notice. You must pay this off before the estate can be finalised.

What Happens to Tax Refunds or Debts After Death?

If the person who has died owed tax, tax obligations after death aren’t lost. The estate will need to satisfy any deceased estate income tax liabilities from the assets of the deceased. Where the estate is short of cash, tax liabilities can be agreed with the ATO on special arrangements.

Keep in mind that unpaid tax duties are generally preferred over other estate payments. A professional from an accounting firms Perth will take care of this and avoid delays or legal problems.

You might have to engage a Deceased Estate Accountant Perth when:

• The deceased individual had property, shares, or a company
• There are multiple beneficiaries and assets
• There are estate income flows that extend past the date of death
• You lack confidence in tax law, deductions, or filing accurate returns
• You need help dealing with the ATO

An accountant can also help with tax return after death in Australia, taking credit for estate TFNs, and validating all paperwork before final disbursements.

When Should You Hire a Deceased Estate Accountant?

Managing a loved one’s tax issues may be very stressful, particularly during the grieving period. Straightforward estates should probably be manageable by you, but very complicated or high-value estates would probably benefit from experts.

You might have to engage a Deceased Estate Accountant Perth when:

• The deceased individual had property, shares, or a company
• There are multiple beneficiaries and assets
• There are estate income flows that extend past the date of death
• You lack confidence in tax law, deductions, or filing accurate returns
• You need help dealing with the ATO

An accountant can also help with estate tax return Australia requirements, taking credit for estate TFNs, and validating all paperwork before final disbursements.

Conclusion

Handling a loved one’s tax affairs after death is complex but essential. Whether it is final returns or the income of the estate, compliance is the priority. To get professional assistance with tax return after death Australia, call on Tax Accountant Perth–your professional Deceased Estate Accountant Perth who can clearly and professionally assist at such a challenging time.