Nothing is Certain but Death and Taxes: Deceased Estates and Dealing with the ATO & Tax
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Benjamin Franklin was pretty spot on when he famously stated that “in this world nothing can be said to be certain, except death and taxes.” Changes to the ATO’s online tax portal now makes identifying and paying a deceased person tax liability more difficult than ever.
An Executor has a duty to ensure that all liabilities of a deceased person are paid, including any tax liability. Extensive enquiries into the affairs of a deceased taxpayer are sometimes required and where a taxpayer or their Estate earned an income in excess of the threshold figure above which income tax is payable, a return to date of death and/or Estate return will need to be prepared by a qualified accountant and filed with the ATO.
Major changes to the ATO’s Tax Agent Portal that commenced on 29 November 2019, have made it more difficult for Executors and Administrators to determine whether a deceased person or their Estate is liable to pay tax.
Tax agents can now no longer access a deceased person’s pre-death tax data. ATO tax officers will now only disclose a deceased person’s tax information directly to an Executor or Administrator who has obtained a Grant of Probate or a Grant of Letters of Administration.
Where an Executor or Administrator has engaged an accountant or tax agent to act on behalf of the Estate and authorised that agent to liaise with the ATO, the ATO will still be unable to release the deceased person’s tax information. This is even in circumstances where the tax agent was the deceased person’s tax agent during their lifetime.
The only way for an Executor or Administrator to obtain a deceased person’s pre-death tax data will be to write to the ATO to request it. The ATO will then post hard copy versions of the deceased person’s tax data and the Executor or Administrator can then provide that information to their lawyer, accountant or tax agent to assist with the preparation of the deceased person’s tax returns. Any additional information or any additional contact with the ATO that may be required, can only be done by the Executor or the Administrator of the Estate.
The changes to the ATO’s Tax Agent Portal are likely to cause significant delays and increased costs in administering a deceased person’s Estate and as the ATO will now only communicate with an Executor or Administrator that has obtained a Grant of Probate or a Grant of Letters of Administration, in most circumstances a Grant of Probate will now be required to deal with tax matters of the deceased and the estate.
For more information on Grants of Probate and Letters of Administration, please see our blogs “Grant of Probate, what does it all mean, and do I need one?” and “Grant of Letters of Administration, what does it all mean, and do I need one?” or contact our friendly team at MMLaw.
The information in this document represents general information and should not be relied on for your specific circumstances. If you require legal advice and assistance on the matters contained or associated in this document you should contact MMLaw.
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The content published in this Blog is in the form of academic papers and the opinions expressed herein are generalised. The information provided is for educational purposes, not specific legal advice.
The application of any principles referred to can alter from case to case and accordingly you should seek independent legal advice in respect of your individual circumstances.