Taxing Deceased Estates

legalupdates wills 03

Tax – it’s the last thing on someone’s mind when dealing with the death of a loved one, but the implications of land tax on a property could be significant. It’s worth stopping to consider your position and to seek legal advice.

Land tax may be payable by a deceased estate, or by a beneficiary of the estate, where the total taxable value of any land owned by the estate is $600,000 or more. In most cases, a home exemption would apply to a family home meaning that no land tax would be payable. However, that is not always the case and even where a home exemption does apply it may only be claimable by an estate for up to 1 year following the death, which means if an estate has not been concluded within that time land tax implications may need to be considered. 

Estate executors may, after the 1 year period from death, seek to have any land tax liability assigned to the ultimate beneficiary of the property.  While this might make no difference to a spouse who continues to live in the property and who can claim the home exemption, it can become a potentially significant financial burden for children and other beneficiaries who may inherit an interest in the land.

There can also be consequences for executors who do not ensure they are registered on title as holding the property for an estate by 30 June following the death. 

It is usually recommended that executors obtain a clearance certificate from the Revenue Department before making a distribution of estate assets where real estate is involved. 

For more information on potential tax implications in administering estates, contact our Accredited Specialist – Succession Law (Qld), Amanda Tomlinson, for a consultation.