What To Do When Someone Dies – A Clear Guide to Handling Tax Affairs

When someone close to you dies, grief isn’t the only thing you’ll have to manage. If you’re named as the person responsible for their estate, there’s also tax to consider. The process may feel daunting, but with the right steps and guidance, you can handle it with care and confidence.

This article outlines what to do when you’re tasked with managing someone’s tax matters after their passing, using the latest information from the Australian Taxation Office (ATO).

Step One: Understand Your Role as Legal Personal Representative (LPR)

If you’re named the executor in the will, or appointed as the administrator by a court (when there’s no will), you’re considered the deceased’s Legal Personal Representative (LPR).

The ATO requires proof before you can act on the deceased’s behalf. You must provide:

A copy of the death certificate
A grant of probate (if there’s a will)
Or letters of administration (if there isn’t a will)

👉 You cannot access tax records or manage affairs until the ATO recognises you as the LPR.
Learn more: Notifying the ATO of a death

Step Two: Lodge the Final Tax Return (“Date of Death” Return)

You must lodge a final tax return if the deceased:

Earned income above the tax-free threshold,
Had tax withheld,
Or had outstanding tax obligations.

This final return is known as the “date of death return.” It includes income earned from 1 July of the relevant financial year up to the date of death.

🔍 Tip: If the deceased was not required to lodge a return, you still need to submit a Non-lodgment advice form to the ATO.

More info: Doing a final tax return

Step Three: Check for Outstanding Tax Returns

Before distributing the estate, you must:

Confirm whether previous years’ tax returns are outstanding
Lodge any that are overdue
Settle all tax debts

⚠️ Important: As the LPR, you can be held personally liable for unpaid tax if you distribute estate assets before all tax is settled.
Learn more: Confirming tax obligations are complete

Step Four: Business and ABN Considerations

Did the deceased operate a business or hold an ABN?

If so, you may also need to:

Lodge the final Business Activity Statement (BAS)
Pay outstanding GST, PAYG or income tax
Cancel their ABN and any tax registrations

💼 For sole traders and business partners, there may also be capital gains tax (CGT) on the sale or transfer of business assets. This is a good time to consult a registered tax or legal advisor.

More info: Deceased estate and small business

Step Five: Income from the Estate After Death

After the person dies, the estate itself may start to earn income. This could come from:

Rental property
Interest from bank accounts
Share dividends (including franking credits)

In this case, the estate is treated as a trust. You’ll need to:

Apply for a Tax File Number (TFN) for the estate
Lodge trust tax returns annually until the estate is finalised

Estate income is taxed at individual rates for the first three years after the person’s death.
Learn more: Doing trust tax returns for the estate

How Long Will This Take?

Settling a deceased estate is not a fast process. It can take 6–12 months, or more for complex estates.

The timeline depends on:

Whether probate or letters of administration are required
Whether the deceased had a business or foreign assets
Any disputes among beneficiaries
How quickly tax and legal requirements are met

Don’t Go It Alone

“Handling someone’s tax affairs after death can feel overwhelming. But with expert help, you don’t need to do it alone.”

Taking over someone’s financial legacy is a serious responsibility, but it’s one you don’t have to shoulder by yourself. Like unearthing gold, it takes time and care—but the value of doing it right is lasting.

If you’ve recently lost a loved one and need guidance managing their tax affairs, we’re here to help.
DJ Grigg Financial has experience supporting families across Latrobe Valley and beyond through this process with clarity and compassion.

📞 Call us today or visit our website to schedule a confidential consultation.

What To Do When Someone Dies: Tax Guide