Chartered Accountants Australia and New Zealand (CA ANZ) has asked the Tax Ombudsman to explore the Australian Taxation Office’s (ATO) requirement to obtain probate before authorising someone to manage a deceased person’s tax affairs. This approach affects both taxpayers and tax agents and is becoming more common as Australia’s population ages. Reducing this administrative burden aligns with the government’s focus on cutting red tape.

Background and issues

The ATO can only share taxpayer information where the law allows, including with a taxpayer’s legal personal representative (LPR), such as an executor or administrator of a deceased estate. Currently, the ATO accepts only a grant of probate or letters of administration as proof that someone is an LPR for tax purposes. Without these documents, the ATO restricts the information it provides to the tax agent appointed by the LPR and may withhold tax refunds.

However, a grant of probate is not always required when someone dies with a will. For example, property held as joint tenants passes directly to the surviving owner under the law of survivorship, without the need for probate.

Members have reported that obtaining probate is costly and can cause significant stress for families finalising a loved one’s tax affairs. The cost can also be disproportionate to the tax refunds being held back. Probate is usually only sought when necessary, such as when the deceased’s bank balance exceeds a threshold set by the bank.

Possible solution

Based on member feedback, CA ANZ has suggested an alternative approach for estates that do not require probate. If a taxpayer was represented by a tax agent at the time of death, CA ANZ proposes that the ATO allow the executor to continue that tax agent relationship and finalise the tax affairs if the executor can provide:

• Proof of their identity
• A certified copy of the death certificate and will
• A solicitor’s letter confirming probate is not required

This approach would enable a smoother process for families and tax agents, reducing unnecessary delays and costs.

Prior advocacy

CA ANZ has previously called for changes to the ATO’s practice of demanding probate to release tax refunds or information when probate is not otherwise required. The ATO has declined to use the Commissioner’s remedial power, citing strict tax secrecy laws and the need to maintain the current definition of LPR.

The Tax Ombudsman investigated this issue in a 2020 report, “Death and Taxes.” The ATO responded in 2024, considering the matter closed. However, CA ANZ believes the issue remains unresolved and has asked the Tax Ombudsman to pursue further improvements and outcomes.