Managing the affairs of someone who has passed away is a deeply emotional responsibility — and it also comes with legal and financial duties, including settling their tax obligations with the Australian Taxation Office (ATO).
If you’re acting as the executor or administrator of an estate, you may need to manage tax returns, settle outstanding liabilities, deal with superannuation, or wind up a business. This guide outlines the key tax steps, including your role as a legal personal representative (LPR), and provides a helpful checklist to support you through the process.
- Establish Your Role With the ATO
The first step is formally notifying the ATO of the death and confirming your authority to act on the deceased person’s behalf.
You’ll need to:
- Provide a death certificate, and
- Lodge either a grant of probate (if there is a will), or letters of administration (if there is no will).
You must also establish your identity with the ATO as the legal personal representative (LPR). This role is typically the executor named in the will, or an administrator appointed by the Supreme Court.
More on notifying the ATO when someone dies – ATO Website
- Understand Your Responsibilities as LPR
As the LPR, you are responsible for:
- Lodging the deceased’s final (date of death) tax return
- Paying outstanding tax debts
- Cancelling tax registrations (e.g. ABNs, GST)
- Lodging a trust tax return for the estate if it earns income
- Managing any tax refunds or credits owed
- Ensuring all tax obligations are met before distributing estate assets
Failure to complete these responsibilities can result in personal liability for unpaid tax.
- Determine if the Deceased Was Running a Business
If the person was a sole trader, had a business partnership, or held an ABN, there may be further responsibilities, including:
- Lodging a final business activity statement (BAS)
- Paying GST or capital gains tax (CGT) on the sale of business assets
- Cancelling the ABN and other registrations
In these situations, professional tax or legal advice is highly recommended.
- Lodging the Final Tax Return (“Date of Death” Return)
The LPR must lodge a “date of death” tax return, covering the period from 1 July of the financial year up to the date of death. This return is similar to a standard individual tax return, but must be marked as a final return.
The ATO may also help you determine whether previous years’ tax returns are outstanding, and assist in accessing the deceased’s tax records.
- Lodging the Estate (Trust) Tax Return
If the estate continues to generate income (e.g. from rental properties, shares, dividends, or bank interest) after the date of death, it becomes a trust for tax purposes. You must then:
- Apply for a TFN for the deceased estate
- Lodge annual trust tax returns
- Pay any tax liabilities owed by the estate
The estate can usually be treated as a trust for up to three years without special trust tax rates being applied.
- Cancelling Tax Registrations
Once all returns are lodged and taxes paid, you must:
- Cancel the deceased’s TFN
- Cancel their ABN, GST, and any business registrations if applicable
ATO Deceased Estate Tax Checklist
Use this checklist as a reference when managing the tax obligations of someone who has died:
Before You Start
✔ Notify the ATO of the death
✔ Confirm your role as legal personal representative (LPR)
✔ Obtain a death certificate and grant of probate or letters of administration
✔ Access the deceased’s tax file number and history via myGov or ATO
Finalising Personal Tax Affairs
✔ Lodge outstanding individual tax returns (previous years if necessary)
✔ Lodge final “date of death” tax return
✔ Pay any outstanding tax debts
✔ Cancel tax registrations (TFN, ABN, GST, etc.)
Managing the Estate
✔ Apply for a TFN for the estate (if required)
✔ Identify any income earned by the estate (e.g. rent, interest, dividends)
✔ Lodge trust tax returns for the estate
✔ Claim any tax refunds or franking credits
✔ Seek tax advice on business CGT or asset disposals
✔ Maintain detailed records of all tax transactions
Distributing the Estate
✔ Ensure all tax obligations are finalised before distributing assets
✔ Retain supporting documentation for audit or legal purposes
✔ Keep beneficiaries informed of potential tax outcomes
Conclusion: A Delicate but Important Duty
Handling the tax affairs of someone who has passed is a complex process, and it’s vital to ensure every step is handled with care. From notifying the ATO and establishing your authority to lodging tax returns and closing accounts, the LPR plays a critical role in protecting the integrity of the estate.
The ATO provides guidance for managing a deceased person’s tax affairs, but due to the complexity, especially if the deceased held investments or ran a business, professional advice from a tax agent or estate lawyer is often essential.
Taking the time to plan and follow the proper process helps avoid delays, reduce legal risks, and ensures the estate is distributed smoothly and lawfully.
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