Deceased Estates & Tax

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Deceased Estates & Tax

Posted on Wednesday, 16 March 2011 10:50 AM

If you have been appointed an executor of a deceased estate, you are responsible for managing the deceased estate. This includes fulfilling the tax responsibilities of the deceased estate.

Capital gains tax (CGT) implications

When the assets of a deceased estate are distributed, a special rule applies that allows any capital gain or loss made on a CGT asset to be disregarded if the asset passes:

to the executor or to a beneficiary, or
from the executor to a beneficiary.

However, if an executor sells an asset of the deceased estate and then distributes the proceeds to the beneficiaries, the sale is subject to the normal rules and CGT applies.

Apart from CGT there can be are a number of additional taxation considerations. Contact the BASMAN for more information.

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2 Comments to Deceased Estates & Tax:

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Ian on Sunday, 17 July 2011 7:24 PM

My father died in May 2010, leaving his house to my sister and I. If we sell the property before May 2012, will we be liable for capital gains tax?

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	BASMAN on Tuesday, 19 July 2011 2:31 PM The CGT treatment in these circumstances will depend (amongst other things) on when the deceased acquired the house. 1. If the house was acquired before 20 September 1985 then there will be no capital gains tax if the beneficiaries of the estate complete the sale of the house within two years. 2. If the house was acquired after 20 September 1985 there will be no capital gains tax if the beneficiaries of the estate complete the sale of the house within two years AND just before the date the deceased died it was their main residence AND was not being used to produce income. This is general advice only and does not consider all the possible circumstances and tax outcomes that may arise. Accordingly it is provided as general information only and should not be relied upon by any person and no liability is accepted by the author.