Taxation of Deceased Estates and Testamentary Trusts is a specialised area that is often poorly understood by many practitioners resulting in inaccurate tax assessments, the unnecessary depletion of estate assets and the possibility of Executors becoming personally liable for unidentified ATO obligations.

We work directly with Legal Practitioners, listed Trustee Companies and Executors right across Australia, providing both reliable and specialised Estates and Trusts taxation services.

Our Estates and Trusts Team are considered as experts in the field of Estate taxation throughout Australia and our clients have confidence in the knowledge that they are dealing with one of the only dedicated team of Estate Taxation Accountants in Australia, who have specialised in this area for over 17 years.

Date of Death Tax Return

An Executor takes on the legal responsibility and liability for the Deceased’s tax affairs, which usually includes lodging a final Income Tax Return for the Deceased called a Date of Death Return. This Return includes all the income and expenses the Deceased incurred up to their date of death.

Our team can assist Executors in preparing and lodging the Deceased final Income Tax Return, ensuring that all the appropriate income, deductions, tax offset and deemed CGT events that can occur on death are correctly included.

Deceased Estate and Testamentary Trust Tax Returns

Both a Deceased Estate and Testamentary Trust are considered as separate legal entities and can have a number of complex and unusual tax situations, such as beneficiaries who lack legal capacity or reside abroad, the establishment of a Testamentary Charitable Trust, or the multiple tax assessment notices that could be received within a single year by the executor or trustee. Our team is experienced in these complex areas, and is able to assist Executors and Trustees in meeting and understanding their obligations, supplying annual Beneficiary Tax Statements and even applying for tax file numbers for these entities. It is critical that executors ensure they are comfortable, and are backed by a team who understands many of these complexities and can assist them in meeting their obligations.

Obtain a Tax History Report

It is the Executor’s personal responsibility to manage any outstanding taxation obligations of the deceased and address any retrospective taxation omissions or errors by the deceased prior to death, that are or should have been identified through their administration of the estate.

As Executors can be held personally liable for any outstanding tax obligations following the finalisation of the Estate, it is highly recommended that upon first being appointed as an Executor you acquaint yourself with the current status of the Deceased’s taxation affairs. To assist is this process, our team can provide a summary of the deceased’s taxation history and identify any outstanding tax obligations.

Tax Clearance prior to finalising an Estate

On the pending closure of an Estate or Testamentary Trust, BNR Partners can provide an estimate of the remaining tax obligations that the Executor must make allowances for. This enables the Executor or Trustee to plan for the finalisation of their administration, and/or assess the viability of making interim distributions to Beneficiaries.

Letter of Advice

It is the Executor’s personal responsibility during the administration of an Estate to finalise any outstanding tax obligations that the Deceased may have had at their date of death including dealing with any potential tax issues that may arise during the administration of the Estate.

As Executors can be held personally liable for any outstanding tax obligations following the finalisation of the Estate, the Executors should show they have provided reasonable care when dealing with the Deceased’s and Estate’s tax affairs. With this job request, BNR can provide you with a Letter of Advice confirming any outstanding tax obligations and advice on tax issues that you may have encountered during the administration of the Estate.

Private Company, Trusts and SMSF’s

Although not directly an Estate asset, many people establish private Companies, family Trusts and Self-Managed Superannuation Funds to hold and develop their personal wealth. Frequently these structures contain historical issues that will need to be addressed as part of an administration, that require both a development of an overall strategy and working through either winding up or transferring control of these structures.  Our team has years of experiences in advising on these sorts of complex structural issues. We are also able to assist executors with the preparation of annual Financial Reports and Income Tax Returns. Executors take comfort in appointing an independent specialist accountant to historically assess and then process these entities.

Withholding Tax Obligations

Executors and Trustees are responsible for the withholding and submission of tax on distributions to foreign Beneficiaries, or when a Beneficiary fails to quote their Tax File Number to the Trustee of a Testamentary Trust. We can assist with the registration process and calculations of correct withholding tax amounts, and meeting the annual reporting obligations to the Australian Taxation Office.

Testamentary Charitable Trusts

Increasing, wealthy people are providing for the establishment of a Testamentary Charitable Trust as part of the estate planning process. For many Executors and professionals this testamentary wish by the Deceased can be very daunting as this type of Trust is not often encountered in general practice.

BNR Partners has many years of experience in dealing with Testamentary Charitable Trusts and often assist Executors and Trustee Companies with the registration for Charitable Trust endorsement. 

The Australian Not for Profit Commission (ACNC) is the federal government body that regulates all charities in Australia, and places a number of financial and non-financial reporting obligations on the Trustees, which we assist many charities with on an annual basis. Trustees should also assess the merits and obligations of registering for GST, and the trust's ability in applying for the refund of Franking Credits; these are all functions that we can assist you with.

In-House Training

Our team regularly presents on the various elements of Estate Taxation at legal conferences, as well as providing in-house training to both Legal Practices and Trustee Companies across Australia. We would be happy to discuss how we may be able to assist you with any conference, seminars or training events on this specialist topic.