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  • Doing trust tax returns for a deceased estate

    You will need to complete a trust tax return for the deceased estate if, after the date of death, the deceased estate receives income.

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    When you complete a deceased estate trust tax return

    A trust tax return of a deceased estate is a separate tax return from the date of death return of the deceased person. A deceased estate is treated as a trust for tax purposes with you as the executor taken to be the trustee of the deceased estate.

    As the executor, you need to work out if you need to lodge a trust tax return for each income year until the deceased estate is fully administered. That means, all of its assets and income are distributed to the beneficiaries and it is no longer earning income.

    You generally need to lodge an individual tax return for the deceased where they have earned income. Where this is the case you lodge a tax return for the period from the beginning of the financial year up to their date of death.

    For any income the deceased estate derives or receives, for the remainder of the income year, the trustee may need to lodge a trust tax return. In some cases, a trust tax return will have to be lodged every financial year until the deceased estate is fully administered.

    A testamentary trust may be established under the terms of a will. It is not the same trust as the deceased estate and may last for many years after the deceased estate has been fully administered.

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    How to register the deceased estate

    If you work out that you need to lodge a trust tax return, you will register the deceased estate. Apply for:

    To apply, you must be the:

    • legal personal representative (a trustee or executor)
    • public trustee with a certificate of authority
    • administrator of the deceased estate appointed by a court.

    Applying for a TFN only

    If you need to manage post date of death income and are not carrying on an enterprise you will need to apply for a TFN.

    You can apply for a tax file number (TFN) for a deceased estate either:

    Applying for an ABN (and TFN)

    If as the legal personal representative, you are carrying on an enterprise to finalise the tax affairs of the deceased estate you will also need to apply for an ABN.

    You can apply for both an ABN and TFN for the deceased estate in the same application (if you require an ABN).

    To apply for the deceased estate ABN online, go to:

    Administration complete in the same income year

    If you complete the administration of the deceased estate in the same income year as the date of death, you may not need to lodge a trust tax return for the deceased estate. Both of the following must apply.

    • No beneficiary is presently entitled to any of the estate's income.
    • The taxable income of the estate is below the tax-free threshold for individuals.

    Otherwise, you have to lodge a trust tax return for the income year.

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    Completing the administration in an income year after the date of death

    If you don't complete the administration of the deceased estate in the same income year as the date of death, you may not need to lodge a trust tax return for that income year. All of the following must apply.

    • The deceased person died less than three years before the end of the income year administration is complete.
    • The net income of the trust estate is equal to or less than the individual tax-free threshold for that income year.
    • No beneficiary is presently entitled to a share of the income of the trust estate at the end of that income year.
    • All beneficiaries of the trust estate are Australian residents during the income year.

    Otherwise, you have to lodge a trust tax return for the income year.

    Remember, you only take into account income the deceased estate receives after the person's death.

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    Last modified: 29 Apr 2021QC 40483