Trust Tax Calculation - Deceased Estate, within 3 years of DOD.

[RPD]

The Trust has a taxable income of $21,706, and in the distribution statement code 15 is used, so no beneficiary distriubution.

On the tax return front cover, we selected tax table 5 - Sec 99 Deceased Estate - within 3 years of death.

AE Tax shows gross tax of $666.14, but with the Low Income Offset allowed of $700, resulting in zero balance.

The ATO has issued the assessment to the Trust, but not given the Low Income Rebate?

So - is AE correct or the Tax Office in this case?

Reading Paragraph 15-300 of the 2021 Master Tax Guide, I suspect it's the ATO.

[Syed1]

Hi @RPD,

For the first three income years, the deceased estate income is taxed at the individual income tax rates, with the benefit of the full tax-free threshold. Deceased estates do not get the benefit of tax offsets (concessional rebates), such as the low-income tax offset. No Medicare levy is payable.

ATO guideline does not specify if tax offsets are applied after the 4th income year
https://www.ato.gov.au/Individuals/Deceased-estates/Doing-trust-tax-returns-for-a-deceased-estate/Ta...

MYOB tax software calculates low-income offset when that tax table is selected, which shouldn't be happening and needs to edit manually until this is fixed in the future software update.

Regards,

Syed

Customer Support Representative