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Tax Tip 110: Tax Issues with Paying Executors of Estates

Discussion in 'Accounting & Tax' started by Terry_w, 16th Apr, 2016.

  1. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Tax Issues with Paying Executors of Estates

    Many people want to leave something extra to the executor of their estate upon death. The position of executor involves a lot of work and involves a lot of risks so it is only natural that some want to give a bit more to the persons that take this role.


    But there could be tax consequences depending on how it is done.


    A payment for services performed as executor will be income for tax purposes under s15-1 ITAA 1997. This is because it is payment directly related to the services provided by the executor, ATO ID 2014/44.


    However gifts are not income if they are given with nothing expected in return.


    Therefore carefully consider how you word your will so you can maximise gifts.


    s15-1 ITAA 1997
    INCOME TAX ASSESSMENT ACT 1997 - SECT 15.1 What this Division is about

    ATO ID 2014/44
    Income: Commission paid to executor of deceased estate

    ATO ID 2014/44 - Income: Commission paid to executor of deceased estate
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,957
    Location:
    Sydney