Is Provisional TAX Payable by a deceased person? And should Financial Statements be compiled annually for a Deceased Estate until the Estate is Finalised?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
The deceased, if he or she was a provisional taxpayer, or should have been one, based on the 2014 legislation may well have had to file a provisional return. It is problematic in that death occurred prior to the date of the first period and one could then argue that none was required. This will also be true of the second period, but may well have required a third payment, but that is voluntary.
We didn’t know what ‘passed away in Mar 13’ implies. For purposes of our guidance we accepted that the person didn’t die before 1 March 2016. The amendment to the Act – paragraph 1 of the Fourth Schedule to the Income Tax Act – which provides that the estate of a deceased person is not a provisional taxpayer, became effective 1 March 2016.
The deceased estate will have to account for income, deductions and capital gains in the period of winding up the estate.
You are correct, the year of assessment of the individual ended on the date of death and the year of assessment for the deceased estate commenced on date of death.