Deceased Estate Tax Return Australia: What an Executor Must Lodge

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Tax is one of the most commonly overlooked executor obligations — and one where mistakes create personal liability. This guide covers what you must lodge with the ATO, in what order, and what happens if you don’t.

Your Role with the ATO as Executor

When someone dies, you become their Legal Personal Representative (LPR) for tax purposes. This means you take on their ATO obligations. The ATO must be notified of your role before you can access the deceased’s tax records or lodge on their behalf.

To notify the ATO: call 13 28 65 (ATO deceased estates line) and advise that you are the LPR. You’ll need to provide your own details, the deceased’s TFN, and evidence of your authority (grant of probate or letters of administration). The ATO will then link you to the deceased’s account.

The Date-of-Death Tax Return

This is the final income tax return for the deceased as an individual. It covers the period from 1 July of the last financial year to the date of death.

What it includes: all income earned from 1 July to date of death — salary, business income, rental income, dividends, interest, any capital gains from assets sold before death.

Due date: The date-of-death return is generally due by 31 October following the end of the financial year in which the person died — but the ATO will typically grant extensions if you contact them early and explain the situation. If you are using a registered tax agent, their lodgement program may give you additional time.

Important: If the deceased had a spouse, the spouse’s tax return for that year must also account for the change in circumstances mid-year. A tax accountant should handle both returns together.

The Trust Tax Return (If Needed)

If the estate earns income during administration — rent from a property, dividends, interest — the estate is treated as a trust for tax purposes. This requires lodging a separate trust tax return (not an individual return) for each financial year the estate remains open and earning income.

A tax accountant is strongly recommended for trust tax returns. The rules around estate income, beneficiary entitlements, and tax-free thresholds are complex.

Capital Gains Tax

Capital assets (property, shares, managed funds) passing through a deceased estate have specific CGT rules:

• Main residence exemption: if the deceased’s home is sold within 2 years of death, it is generally exempt from CGT regardless of whether the deceased would have qualified for the exemption
• Pre-CGT assets: assets acquired before 20 September 1985 pass to beneficiaries CGT-free
• Post-CGT assets: the beneficiary inherits the deceased’s cost base, meaning CGT is triggered when the beneficiary eventually sells
• Collectables and personal use assets have different rules — seek specific advice if the estate includes art, jewellery, or similar items

If assets are sold during estate administration (before distribution), any capital gain or loss is included in the estate’s trust tax return for that year.

The ATO Clearance Certificate

Before making the final distribution to beneficiaries, the ATO recommends obtaining a clearance certificate — a formal confirmation that the estate has no outstanding tax obligations.

Why this matters: if you distribute the estate and a tax debt later emerges that can’t be recovered from beneficiaries, you as LPR may be personally liable for it. The clearance certificate protects you.

Apply for the clearance via the ATO’s online portal or by calling the deceased estates line. Processing takes 4–8 weeks in most cases.

Tax Debts and Refunds

If the deceased owed the ATO: the tax debt is paid from the estate before distribution. ATO debts rank equally with other unsecured creditors.

If the ATO owes a refund: the refund is paid to the estate. It forms part of the estate assets and is distributed to beneficiaries according to the will.

Do You Need a Tax Accountant?

For simple estates with straightforward employment income, one property, and no complex investments — a capable executor can lodge the date-of-death return themselves using myTax via myGov.

A registered tax accountant is strongly recommended if: the estate has rental income, business income, or investment income during administration; significant capital gains events occurred; the estate will take more than one financial year to administer; or the deceased’s affairs were complex. Accountant fees for deceased estate work are paid from the estate.

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The Executor’s Guide provides general information about estate administration in Australia. It is not tax advice. Deceased estate tax obligations are complex — engage a registered tax agent for anything beyond a straightforward date-of-death return.

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Related guides

• What to Do When Someone Dies in Australia
• What Is an Executor?
• Executor Duties in Australia: The Complete Legal Guide
• Do I Need Probate? A Plain-English Guide