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  • Doing trust tax returns for a deceased estate

    A deceased estate is treated as a trust for tax purposes with you as the executor taken to be its trustee. An individual tax return is generally required to be lodged by the trustee for the deceased's income from the beginning of the financial year up to their date of death. However, for the remainder of the income year, the trustee may be required to lodge a trust tax return for the income received or derived by the deceased estate. 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.

    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 (all of its assets and income are distributed to the beneficiaries) and it is no longer earning income.

    Find out about:

    If you complete the administration in the same income year as the date of death

    If you complete the administration of the deceased estate in the same income year as the date of death, you don't need to lodge a trust tax return for the deceased estate if both of the following 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.

    See also:

    If you don't complete the administration in the same income year as 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 don't have to lodge a trust tax return for the income year if all of the following apply.

    • The deceased person died less than three years before the end of the income year.
    • The net income of the trust estate is less than the individual tax-free threshold.
    • The deceased estate received no income from capital gains or franked dividends.
    • The deceased estate received no income from which tax has been withheld.
    • The deceased estate did not carry on a business.
    • No beneficiary is presently entitled to a share of the income of the trust estate.
    • All beneficiaries of the trust estate are Australian residents.

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

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

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    Last modified: 23 Jul 2018QC 40483