Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
EH 20: Income when refund given on death
or “Refunds after death may count as income”
You could also call this:

“Handling tax refunds after death: Trustees can allocate income to earlier years”

When someone dies, they might get a refund that includes money they put into an income equalisation scheme in an earlier year. If this happens, the person looking after their estate (called a trustee) can choose to put some or all of that money back into the earlier year it came from.

If the trustee decides to do this, the money they put back into the earlier year counts as income for the person who died. It’s treated as if they earned it in that earlier year, under a rule called section CB 27.

The trustee needs to tell the tax department (called the Commissioner) if they want to do this. They can tell the tax department when they file the tax return for the person who died, or at another time if the tax department says it’s okay.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

Next up: EH 22: Income when refund given on death, and election to allocate amount to later year or years

or “Trustee can move deceased's income equalisation refund to later years”
Next

Part E Timing and quantifying rules
Income equalisation schemes: Refunds: on application

EH 21Income when refund given on death, and election to allocate amount to earlier year

  1. This section applies when—

  2. a refund under section EH 19 includes a deposit made for an accounting year earlier than the accounting year in which the person dies; and
    1. the trustee of the person’s estate chooses to allocate some or all of the deposit to the earlier accounting year.

      1. The amount allocated by the trustee to the earlier accounting year is income, under section CB 27 (Income equalisation schemes), derived by the person in the corresponding income year.

      2. A trustee makes an election under this section by giving the Commissioner notice within 1 of the following times:

      3. the time within which the trustee is required to file a return of the person’s income for the period to the date of the person’s death:
        1. a further time allowed by the Commissioner in a case or class of cases.

          Compare