An Executor who has obtained Probate of a deceased’s Will or an Administrator who has obtained letters of Administration of a deceased person’s Estate is required to provide tax returns and other information that the deceased was required to provide to the Australian Taxation Office (‘ATO’).
The ATO has issued a Practical Compliance Guideline, PCG 2018/4EC.
A Legal Personal Representative or representatives (‘LPR’) is also liable to pay any outstanding tax-related liabilities of the deceased person up to the value of the deceased’s assets that come into the LPR’s hands. The LPR may have to meet these liabilities personally, if they distribute the Estate’s assets with notice of a claim by the ATO.
A liability may relate to either an assessment or an amended assessment that is made after the death of the deceased person. Often LPRs delay distribution of the Estate assets until after the relevant review period (either two or four years from the date of an assessment), to ensure that the LPR does not have to personally satisfy a liability relating to an amended assessment. The ATO states in the guideline that the guideline is intended to enable LPR’s smaller and less complex Estates to finalise those Estates without concern that they may have to fund a liability of the deceased from their own assets. It sets out when an LPR will be treated as having notice of a claim by the ATO (including a claim arising from an amended assessment).
The guideline is available on the ATO website.
For more information, contact Rockliff Snelgrove Lawyers on (02) 9299 4912.