My mother died over 12 years ago and I am the executor of her will. I have recently been tracked down by CBA as there were shares that I had no idea about and unclaimed dividends for 12 years. As executor I have now been paid the unclaimed dividends and am transferring the shares to various beneficiaries. Some may need to be sold. My question is do I need to put in tax returns for the estate for all those years or do I just need to do the year I actually received the dividends and the year they are sold (for Capital gains tax)? I received $47 000 in dividends. The dividends were fully franked at 30%. There are over 10 beneficiaries. Will the beneficiaries need to declare their share of dividend income or will it be Estate income, since the shares are still under the estate of my late mother?
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Hi @ShellyK,
You may need to lodge returns for each year the dividends were earned, not just the year they were paid.
For the first 3 income years after death, you must lodge a trust tax return if:
- The estate’s net income is above the tax-free threshold.
- A beneficiary is presently entitled to income at year-end.
- A beneficiary is a non-resident.
From the 4th year onwards, a trust tax return has to be lodged if the estate earns any income, including dividends or capital gains.
Unless a beneficiary is presently entitled to the income they don't report or pay any tax on the net income of the estate.
If you're unsure whether the beneficiaries are presently entitled, I'd recommend asking for a private ruling.
A tax agent can also help get everything lodged correctly.
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