My partner died in 2021. her will left her estate to her son, to be accessed when he turns 22, which he does this November. as executor. I invested her estate money in interest bearing deposits - some $650,000. It has earned around 5% income per year. Do I need to pay tax on this income, and if so how? Do I need to register the estate account for a TFN?
Link explains when a deceased estate trust tax return is required.
When and how to lodge returns for a deceased estate | Australian Taxation Office
If income is more than $18,200 then a trust tax return is required. You will need a TFN. See above.
Question here is how did you invest without a trust TFN?
Hi @Papahem,
Yes, the interest income earned by the estate is considered taxable income. As the executor, you would lodge trust tax returns for the estate for any income earned after your partner's passing. Tax will need to be paid on the net income of the estate, which includes the interest earned from the deposits. The tax rate will depend on the estate's circumstances, such as whether beneficiaries are presently entitled to the income or if the income is retained by the estate.
As @Taxduck said, if the estate's net income is less than $18,201 in a financial year (and no beneficiary is entitled to the income) a trust tax return may not be required, and no tax would need to be paid.
You will need to apply for a Tax File Number (TFN) for the deceased estate. The TFN is needed to lodge tax returns. You can find the info on how to do this in the link Taxduck has shared.
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