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Bandi(Initiate)Initiate
26 Feb 2025

Deceased estate assets are shares and the beneficiary is a foreign resident. This will trigger capital gains tax event K3 which means declaring the CGT in the date of death tax return.


The will states that the estate will pay all taxes owing which in practice means putting some of the shares aside to sell via the estate in order to pay the tax assessed in the date of death return. But how does the executor know how much to put aside until the tax liability from the date of death tax return is assessed? If the executor has not set aside enough shares to liquidate then can he or she do the assessment again? Or will he or she be liable for the tax themselves?

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9 replies
102 views
9 replies

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Most helpful reply

RachelATO(Community Moderator)Community Moderator
4 Mar 2025

Hi @Bandi,


This is a complicated situation for you. Generally, the Executor of a deceased estate is not going to be individually/personally liable for any tax.


Has the DoD tax return been assessed? You've asked if this return can be amended so does this mean the Executor has already lodged the return and the information included is incorrect?


If the shares have been distributed to the foreign beneficiary, and the Estate is finalising the administration, it could be worth asking for a private ruling. This avenue will give you a clear answer to your questions, as there may be obligations for the Estate and the non-resident beneficiary.


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YellowPotato(Taxicorn)Taxicorn
26 Feb 2025

Wouldn't you be able to calculate estimate the tax payable on the gains? The 'proceeds' would be the market value on the date of death.


EDIT: with the gains known and along with other income the individual may have before their death, you can calculate estimate the tax payable.


I think it would be best to see a tax agent or professional for estate part. I don't think it matters at that point for Australian Tax, the foreign resident beneficiary would be considered to have owned the shares from the date of death. https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/inherited-assets-and-capital-gains-tax/cost-base-of-inherited-assets

Bandi(Initiate)Initiate
27 Feb 2025

Thanks for the thoughts. Doing an estimate seems terribly imprecise. What if the tax to be paid in the date of death return exceeds the residual in the estate (bearing in mind that the estate also has to pay out CGT when it liquidates the shares)? This would leave the executor being liable to pay the tax from their own pocket.


Or could the executor ask to revise the date of death return and submit it again?



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Date of death tax return and foreign beneficiary - how pay assessed tax? | ATO Community