When a taxpayer passes away, managing their tax affairs becomes a critical responsibility to ensure compliance with the Australian Taxation Office (ATO) and proper administration of the estate. Understanding who is legally authorised to act on behalf of a deceased taxpayer is essential for executors, administrators, family members, and financial representatives. This detailed guide explains the roles, authorities, and procedures involved in representing a deceased taxpayer in dealings with the ATO.
Executor: The Primary Representative
The executor is the individual (or individuals) appointed in the deceased’s will to administer the estate. The executor’s duties include managing financial matters, paying debts, and distributing assets. They have the primary authority to act on behalf of the deceased taxpayer for tax-related matters.
Executors must notify the ATO of the death and may be required to lodge final tax returns, manage outstanding tax liabilities, and communicate with the ATO during estate administration.
Administrator: When There Is No Will
If the deceased did not leave a valid will (intestate), or the executor is unable or unwilling to act, the court may appoint an administrator to manage the estate. The administrator assumes similar responsibilities and legal authority as an executor and can act on the deceased’s behalf in tax matters.
Legal Personal Representative (LPR)
Both executors and administrators are collectively known as Legal Personal Representatives. The LPR has the legal authority to manage the deceased’s financial and legal affairs, including dealings with the ATO.
Grant of Probate or Letters of Administration
To formally prove their authority, executors typically obtain a Grant of Probate, while administrators receive Letters of Administration from the Supreme Court. These documents are often required by the ATO to confirm that the representative has the legal right to act on behalf of the deceased.
Tax Agent or Representative Acting on Behalf of the Estate
The LPR may appoint a registered tax agent or other authorised representative to liaise with the ATO on their behalf. This professional can assist with:
- Preparing and lodging final and estate tax returns
- Negotiating payment plans or disputes
- Handling correspondence and compliance issues
To act officially, the tax agent must have written authorisation from the LPR.
Family Members or Other Individuals
Family members or friends do not have automatic authority to act on behalf of a deceased taxpayer unless formally appointed as executor or administrator. Without legal appointment or authorisation, they cannot manage the deceased’s tax affairs with the ATO.
Notification and Documentation Requirements
When acting for a deceased taxpayer, representatives must provide the ATO with:
- Proof of death (death certificate)
- Proof of appointment as executor or administrator (Grant of Probate or Letters of Administration)
- Written authorisation if represented by a tax agent
- Tax File Number (TFN) of the deceased
Responsibilities of Representatives
Those acting on behalf of the deceased are responsible for:
- Lodging the deceased’s final tax return
- Lodging estate tax returns for income earned after death
- Paying any outstanding tax liabilities
- Communicating with the ATO and responding to queries
- Maintaining accurate records and documentation
When Does the Authority to Act End?
The authority of the executor or administrator continues until the estate is fully administered and all tax matters are finalised. Once the estate is settled and final tax obligations are met, the representative’s role in tax affairs concludes.
Conclusion
Acting on behalf of a deceased taxpayer requires proper legal authority, usually held by the executor or administrator. These representatives carry significant responsibilities in managing tax affairs and ensuring compliance with the ATO. Understanding who can act, what documentation is needed, and the scope of responsibilities helps simplify the estate administration process and provides clarity during a challenging time.
