Hi @blackguard,
The final tax return for a deceased person includes only income they earned and expenses they incurred up to the date of death.
If money was transferred while the person was alive and later returned and the amount returned is simply a repayment of funds (e.g. a loan or reimbursement of money belonging to the deceased), it is generally not income, so it does not need to be declared or taxed in the final return. Instead, it forms part of the estate assets.
However, key factors to consider are:
- When the money was returned (before or after death)
- What the original transfer represented (loan, gift, or something else)
If the funds were returned after death, the transaction is typically between the estate and the EPOA and would not be included in the deceased’s final return. It would simply increase the estate assets.
If the return occurred before death, or if the original transfer involved income or assessable amounts, the tax treatment may differ.
Any income earned by the estate after death is reported separately in a deceased estate (trust) tax return, not in the final return.
Because EPOA transactions can involve legal and tax complexities, it may be worth confirming the nature of the transaction before finalising the return.
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