State probate duty
Probate duty in Victoria was abolished on 1 January 1984 for the estates of all persons dying on or after that date. Since 7 June 2000 no formalities are required, even for estates where the deceased died prior to 1 January 1984.
Federal estate duty
This duty was abolished on 1 July 1979. It can be levied only where the deceased died before that date, leaving assets to a brother or sister, remote relative or total stranger. Contact the Australian Taxation Office (see ‘Contacts’ at the end of this chapter).
An All the property a person has, including real property and personal property. It is often used to describe property belonging to someone who has died, or the property of a bankrupt. is liable to pay income tax on the deceased person’s income up to the date of death as if the deceased was still alive. If the estate continues to earn income after the date of death, the estate or the beneficiaries are liable for income tax on that income.
Capital gains tax could be incurred if the estate or a (1) Someone whose money or property is being looked after for them by someone else (called a trustee). (2) A person who is left something in a will, also sometimes called a legatee. See also trust. sells an estate asset and there is a capital profit on the sale. The law here is extremely complex and advice should be taken from an accountant or lawyer as to Legal responsibility, enforced by civil or criminal courts. in any particular case (div 128 Income Tax Assessment A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. 1997 (Cth)) before any sale or transfer of an estate entitlement occurs, particularly if a life interest in an asset is dealt with.
The expense in the administration of estates are:
- An executor’s commission can be charged by an The person named in a will as the one who must ensure that the deceased person’s intentions, as stated in the will, are carried out. and a trustee, if they are appointed as an executor in the A document that sets out what a person wants to happen to their money and other property after they die., and by an (1) (wills) Someone who takes legal responsibility for the possessions of a person who has died without making a will, or who is still alive but cannot manage their own possessions. For example, an administrator may be appointed to manage the money, house or other possessions of a person who has a severe mental disability. (2) (companies) A manager appointed by the directors of a company that is in financial difficulty. This may give creditors a better chance of getting their money back because the company can keep trading under supervised management instead of being wound up. (s 65 A&P Act); commission is also payable to trustee companies (see ‘Trustee companies’, below).
- Legal fees may be charged.
The recommended charges for solicitors proving the will depend on the gross value of the estate. Additional charges will be made where a A legal practitioner (lawyer) who sees clients and opens files to deal with their legal matters but usually does not appear in court. See also barrister. also acts as an executor or where conveyancing or other work is involved (e.g. where a joint The agreement between a landlord and a tenant for the rental of a property. is converted to a single tenancy). The following charges are therefore a basic minimum for obtaining the grant of probate or administration only. See order 9.01 and appendix 3-A of the A&P Rules.
|Gross value of estate||Legal charges|
|Up to $50 000||$499|
|Up to $70 000||$572|
|Up to $80 000||$608|
|Up to $90 000||$644|
|Up to $100 000||$680|
|$680 plus $35 for every $50 000 over $100 000 of the gross value of the estate||$35|
State Trustees (1) A statement giving the details of a crime an accused person is claimed to have committed. (2) A personal property security. (3) A judge’s directions to a jury at the end of a case. in accordance with the scale of charges in section 13 of the State Trustees (State Owned Company) Act 1994 (Vic). (For the State Trustees’ contact details, see ‘Contacts’ at the end of this chapter.)
For administering an estate, a private trustee company must charge in accordance with the prescribed scale of charges in section 601TAA of the Corporations Act 2001 (Cth). The State Trustees and other trustee companies will give particulars of their exact charges upon request.
A person appointed executor/trustee or granted A document that gives a person authority to manage the property of a person who has died without making a valid will that covers all their estate. See also intestate. is entitled to apply to the Supreme An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate. of Victoria for a commission or percentage not exceeding 5 per cent of the deceased’s gross assets (s 65 A&P Act). The usual rate of capital commission that is allowed by the court is between 2–3 per cent of the gross assets of the estate, depending on the size of the estate and the amount of time and trouble the executor incurs in winding up the estate. An executor may also be granted commission on income of an estate during the time the estate is administered by the executor. No specific rate is fixed by Statutory rules made by parliament or by bodies the parliament delegates power to, for example a local council or a registration authority. See delegated legislation; statute., but percentages of up to 5 per cent are usual, depending on the difficulty of administration.
It is unusual for the full amount of commission of 5 per cent to be granted unless the estate is very complex or the circumstances are very unusual. The commission will be reduced or refused if the court is satisfied that the executor, administrator or trustee was guilty of misconduct or incompetence in relation to carrying out their duties to the estate.
It is possible to avoid an application to the court if:
- all beneficiaries are legally capable and agree on a rate (under 5 per cent) with the executor; or
- the rate is specifically set out in the will.
The Administration and Probate and Other Acts A change made to a legal document or Act of parliament. (Succession and Related Matters) Act 2017 (Vic) (s 65) gives the Supreme Court the power to supervise the taking of an executor’s commission, and requires the early Providing information to another person or institution as required by a contract or other legal process. of the rate of commission that the executor will charge (ss 65A–65D A&P Act).