Executor living overseas - is it a tax problem

An executor is the person (or persons) appointed in your Will to administer your estate after you pass away.

In a lot of cases, people appoint their spouse first but if they pre-decease them, they nominate one or more of their children. If none of the executors in your Will are living in Australia at the time of your death, your estate will be considered non-resident. This could lead to the following tax consequences:  

• The estate may not be able to access the income tax free threshold (currently $18,200)
• The estate may not be able to obtain franking credit refunds on dividends
• The estate may not be eligible for the 50% capital gains tax discount on your assets
• The estate will pay higher non-resident tax rates on income
• The estate may have to pay a higher rate of land tax on property.

As a result, your estate could end up paying more tax than it otherwise would have, had the executor been an Australian resident. It is not necessary for all of the executors in your Will to live in Australia.

Provided at least one of your executors is an Australian resident, then your estate should not be subject to these additional tax consequences.

An alternative, if you have no other person, is to use the Public Trustee in the state or Territory where you reside. Note that this comes with a cost.