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  • Tax rates – deceased estate

    The income of a deceased estate may be taxed at the same rate as an individual for the first 3 years, and at a higher rate after that.

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    First 3 income years

    Normally, a trustee who is assessed on the net income of a trust pays tax at the top marginal tax rate.

    When you lodge your first trust tax return for the deceased estate, you can apply for a concessional rate of tax.

    • The concessional rate is the same as the individual income tax rates, with the benefit of the full tax-free threshold.
    • The concessional rate will apply for the first 3 income years of the deceased estate, unless there are material changes to the estate's circumstances.
    • Deceased estates do not get the benefit of tax offsets (concessional rebates), such as the low-income tax offset. No Medicare levy is payable.

    You cannot extend this concessional period beyond the first 3 income years.

    Example – first 3 income years

    Joan passed away on 5 April 2021.

    The first income year for Joan's deceased estate is 6 April 2021 to 30 June 2021.

    The second income year is 1 July 2021 to 30 June 2022.

    The third income year is 1 July 2022 to 30 June 2023.

    If Joan's deceased estate earned taxable income of $18,200 or less during these years, there is no tax payable.

    End of example

    Fourth income year and later

    For deceased estates that continue to be administered beyond the third income year, the following tax rates apply.

    Tax rates 2020–21 and 2021–22

    Deceased estate taxable income (no present entitlement)

    Tax rates

    $0 – $416

    Nil

    $417 – $670

    50% of the excess over $416

    $671 – $45,000

    $127.30 plus 19% of the excess over $670

    If the deceased estate taxable income exceeds $670, the entire amount from $0 will be taxed at the rate of 19%

    $45,001 – $120,000

    $8,550 plus 32.5 cents for each $1 over $45,000

    $120,001 – $180,000

    $32,925 plus 37 cents for each $1 over $120,000

    $180,001 and over

    $55,125 plus 45 cents for each $1 over $180,000

    Tax rates 2019–20

    Deceased estate taxable income (no present entitlement)

    Tax rates

    $0 – $416

    Nil

    $417 – $670

    50% of the excess over $416

    $671 – $37,000

    $127.30 plus 19% of the excess over $670

    If the deceased estate taxable income exceeds $670, the entire amount from $0 will be taxed at the rate of 19%

    $37,001 – $90,000

    $7,030 plus 32.5% of the excess over $37,000

    $90,001 – $180,000

    $24,255 plus 37% of the excess over $90,000

    $180,001 and over

    $57,555 plus 45% of the excess over $180,000

    Last modified: 22 Dec 2021QC 49909