At a recent tax conference a number of issues were addressed in relation to the administration and the tax implications of deceased estates.
You will all experience a deceased estate during your lifetime and the usual method is to contact a solicitor and leave it up to them. However, it still is important to understand the processes. Your position may be as the Executor, Beneficiary or business partner of the deceased.
The Executor is the person who the deceased has asked to administer the wishes stated in the will. If you are appointed to this position you should ensure you have been advised by the deceased when they executed the will. It may not be as simple as having the solicitors do all the work. If you are familiar with the family or a family member then the issues may not be alarming. It is you who has the responsibility entrusted in you by the deceased. You will be required to ensure that all assets are located and this can usually be with the assistance of the legal and accounting people who handled the affairs of the deceased. Please appreciate that you do have responsibilities but seek help from these people.
Taxation can be very complicated as tax returns need to be lodged for the period from 1 July to date of death and then an Estate return needs to be lodged for the remainder of the taxation year in which the person deceased. It may be necessary to complete taxation returns during the period of administration. There are many issues that are different to normal tax return regulations. Implications of capital gains tax and asset valuations are extremely important in the administration of the estate. If some of the beneficiaries are non-residents there can be complications in regard to CGT depending upon the assets they receive under the will.
Twomeys has wide experience in advice regarding the taxation of deceased estates which is handled by our accounting and business advisory team. Our financial planning division have expertise in the related issues of investments and superannuation. Our Superannuation management division have all facets of SMSFs, Industry and Insurer funds covered and advise Executors and beneficiaries of these.
We recommend that if you are preparing your will with your solicitors and are in business of any description that you ask us to assist. Appreciate that we have regular contact with you and can give a valuable contribution to your succession planning advice.