The loss of a loved one is an incredibly challenging time, compounded by not knowing what to do. If you are responsible for managing the estate of someone who has passed away, it’s crucial to understand the tax and financial obligations involved. Here’s a quick guide but I recommend talking IRD or with an accountant for advice.

LEGAL AUTHORITY TO ACT

Firstly, ensure you have the legal authority to act on behalf of the deceased. This responsibility is often granted in the will of the deceased. If there is no will, you may have to apply to the court for letters of administration.  This will depend on the value of the estate.  Having the proper legal standing is essential for dealing with the IRD and managing the estate effectively.

INFORMING THE IRD

Notifying the IRD about the death is a crucial step. This notification ensures:

• Any tax refunds due are paid to the estate.
• Penalties on outstanding tax are halted.
• Child support payments are appropriately handled.
• Changes to a Working for Families situation are recorded.
• Student loans are addressed.
• KiwiSaver funds are transferred to the estate, and the provider is informed.

REPORTING THE FINAL INCOME

From the tax year ended 2023, executors must decide how to report income received within 28 days following the death. This can be done by:

– Including it in the final income tax return for the individual, or

– Filing a return for the estate.

For detailed information, refer to the [IR288 Guide – Trust and Estate Income Tax Rules](https://www.ird.govt.nz).

FILING RETURNS AND REQUESTING REFUNDS

1. Let the IRD Know: Inform the IRD that the person has died.
2. File a Final Income Tax Return: Complete the final tax return for the deceased.
3. File an Estate or Trust Return: If applicable, file a return for the estate or trust.
4. Request a Refund: If the deceased is due a tax refund, request this on behalf of the estate.

Managing these tasks can be complex, but addressing them promptly helps ensure the estate is settled correctly and in compliance with tax regulations. For further assistance, consult with a tax professional or legal advisor. 

During this difficult time, having a clear understanding of these requirements can alleviate some of the burdens, allowing you to focus on what truly matters.