By Kim Reynolds
Dealing with tax issues is not normally high on the list of priorities when a loved one dies. However, at some point the executor of the estate will need to address the outstanding tax obligations of the deceased and the estate.
In this article, Kim Reynolds, our Tax Advisory Director, discusses the current process for dealing with the ATO in relation to a deceased client and the need for the executor/administrator to have a grant of probate/letters of administration.
How does the ATO find out if someone has died? What happens next?
The ATO may become aware that a person has died by:
- Notification from another Government department e.g. Services Australia; or
- Notification by an ‘authorised person’ (you can find the ATO form here: Notification of a deceased person) (refer below).
If the person had a tax agent, once the ATO has been notified the person has died, they will be removed from the tax agent list by the ATO.
Also, following the notification to the ATO, only an ‘authorised person’ can appoint a tax agent for the deceased.
The ATO won’t provide a deceased person’s information to registered tax agents, BAS agents or legal practitioners who:
- are engaged by a family member, or an executor who is administering the estate but does not have grant of probate; or
- were previously engaged by the deceased before their death.
Who is an ‘authorised person’?
A person will be an authorised person if they are:
- the nominated executor with a grant of probate; or
- an administrator with letters of administration.
What happens if there is no grant of probate or letters of administration?
If the executor/administrator is not an authorised person, the ATO may only provide them with limited information.
A tax agent can only be appointed by an authorised person and must confirm the following when notifying the ATO of their appointment as tax agent:
“I confirm that I am aware this client is deceased, and that I am the estate executor or administrator with grant of probate or letters of administration, or I am authorised to act on their behalf.”
This means that tax agents are unable to be appointed and cannot lawfully be an authorised contact on the deceased person’s ATO records without being appointed by an authorised person with probate or letters of administration.
Although a grant or probate or letters of administration may not be necessary to deal with many elements of a deceased estate, currently they are still required to deal with the ATO in respect of the deceased and their estate.
The ATO is working on a practical solution but until then, if an executor/administrator or adviser, wants to deal with the ATO in relation to the deceased or their estate, either:
- probate must be granted; or
- letters of administration issued.
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.