When someone dies: the tax to-do list

When someone close to you dies and you take responsibility for their tax affairs, you need to notify the Australian Taxation Office (ATO) and complete several important tax‑related steps. Acting early and understanding your role can help you manage the estate efficiently and avoid delays.

Step 1: Notify the ATO and Establish Your Authority

Start by notifying the ATO of the death and confirming your identity as the deceased person’s representative. You will need to provide official documentation, such as:

• A death certificate, and
• Either a grant of probate or letters of administration

These documents allow the ATO to recognise who has authority to manage the deceased person’s tax affairs.

Step 2: Act as the Legal Personal Representative (LPR)

To manage all tax matters fully, you must act as the deceased’s legal personal representative (LPR). The LPR is usually:

• The executor named in the will, or
• A court‑appointed administrator if no will exists (often the next of kin)

A Supreme Court in your state must grant probate or letters of administration before the ATO recognises you as the authorised LPR for tax purposes. This authority allows you to access tax records, manage liabilities and distribute estate assets in line with the will or court order.

Step 3: Check Whether the Deceased Ran a Business

Confirm whether the deceased operated a business, such as a sole trader arrangement or partnership. If they did, additional tax obligations may apply, including business activity statements (BAS), GST or capital gains tax. In these cases, seek specialist legal or tax advice to ensure compliance.

Step 4: Lodge the Final (“Date of Death”) Tax Return

You may need to lodge a final tax return, often called a date‑of‑death return, covering the period from 1 July to the date of death. You should also check whether the deceased had any outstanding tax returns from earlier years and arrange payment of any tax owing.

The ATO can help you access the deceased person’s tax information once it recognises your authority.

Step 5: Lodge a Trust Tax Return for the Estate (If Required)

If the estate earns income after the date of death—such as rent, dividends or interest—the estate is treated as a trust for tax purposes. In this case, you must lodge a trust tax return and manage any refunds or franking credits owed to the estate.

Step 6: Finalise All Tax Obligations

Before distributing estate assets, ensure you have:

• Paid all outstanding tax liabilities
• Received any tax refunds or credits
• Cancelled tax registrations, including ABNs and GST registrations, where applicable

Only once you complete these steps can you safely distribute assets to beneficiaries in accordance with probate or letters of administration.

Allow Time to Complete the Process

Finalising a deceased estate takes time. In many cases, the process can take six to twelve months, or longer for more complex estates. Planning ahead and seeking professional advice where needed can help reduce stress and delays.