Since the announcement of Australia’s new property withholding tax regime on 1 July, Murray Howlett a partner in Pilot’s tax team has flagged the risks to executors and administrators of deceased estates of this withholding tax.
The Australian Tax Office (ATO) has now taken a sensible step that lightens the burden on legal personal representatives (LPRs). They released a class variation meaning that from last week, there is no withholding required under this regime on the following transfers:
- When an individual dies, and their LPR is taken to acquire the asset;
- Where a beneficiary takes ownership of the asset (under the will or intestacy provisions, not as a purchase) from the LPR or from the deceased; or
- A joint tenant acquires the deceased’s interest under the principle of survivorship.
Importantly, executors and administrators will still need to consider the new withholding tax regime if they are selling real property (or interests in the same) out of the estate.