PCG 2018/4 – Income Tax – Liability of a Legal Personal Representative of a Deceased Person

The Law Council of Australia provided a submission to the Australian Taxation Office (ATO) in relation to the ATO’s consultation regarding Practical Compliance Guideline ‘PCG 2018/4 – Income tax – liability of a legal personal representative of a deceased person’ (PCG 2018/4). 

The Law Council reiterates¹ that PCG 2018/4 is a positive measure to assist an executor or administrator of a deceased person’s estate (a legal personal representative (LPR) perform in good faith their obligations in relation to addressing the tax liabilities of a deceased person, without exposing themselves to personal liability.

The Law Council has made several suggestions below as to how PCG 2018/4 could be improved and expanded to assist a greater number of LPRs perform this function. Most significantly, it suggests:

• expanding the applicability of PCG 2018/4 to estates with a total market value of estate assets of up to $10 million, with consideration also given to:
  - permitting estates where the deceased person was a member of self-managed superannuation funds (SMSF) to come within the PCG’s purview; or/and
  - (depending on the ATO’s comfort) removing the total market value limit altogether;
• increasing the examples in PCG 2018/4, with a particular example provided in relation to compliance with the requirement that ‘the deceased was not assessable on a share of the net income of a discretionary trust’; and
• increasing public awareness of PCG 2018/4.

Read the full submission below.

^{1 Law Council of Australia, ‘Death and Taxes – Investigation into ATO Systems and Processes for Dealing with Deceased Estates’ (18 December 2019) https://lawcouncil.au/publicassets/e27e311f-4f9e-ea11-9434-005056be13b5/3724%20-%20IGTO%20death%20and%20taxes.pdf [24].}

Last Updated on 26/11/2024

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