Filing for a deceased taxpayer: the representative duties
Tax is not the first thing anyone deals with after a death, and it should not be. But a few decisions taken in the first months make the difference between a straightforward administration and one that stalls a property transfer two years later.
Two separate positions
| The deceased position | The heirs positions | |
|---|---|---|
| Who handles it | The legal representative | Each heir, in their own return |
| What it covers | Income and tax to the date of death; any outstanding earlier years | Inherited assets from the point of entitlement, and income they produce |
| The wealth statement | The deceased final position | The asset enters each heir statement, explaining an increase in their net worth |
| Common failure | Unfiled earlier years left unresolved | Inherited asset never declared, surfacing on eventual sale |
What the representative does
- Establish the position. Which tax years are filed, which are outstanding, whether any notice or proceeding is open, and whether there is tax payable or a refund due.
- Secure access to the records. IRIS credentials, bank statements, property documents, investment records, and the last filed wealth statement — which is the starting point for everything.
- Deal with outstanding years. Unfiled returns generally have to be resolved, and doing so often has to precede clean asset transfers.
- File for the period to death where required, covering income and tax to that date.
- Settle any liability from the estate, or claim any refund due to it.
- Document the distribution so each heir can evidence how their share arose.
Who files what, in the year of death
| Return | Covers | Filed by | Common error |
|---|---|---|---|
| Deceased's final return | Start of the tax year to the date of death | Legal representative | Including post-death income |
| Each heir's own return | Their share of income from the date of death | The heir | Assuming the estate files it for them |
| Wealth statement, deceased | Position at the date of death | Legal representative | Omitted, so the estate never closes cleanly |
| Wealth statement, each heir | Inherited assets in the year received | The heir | Asset appears with no funding source |
Row four is where the real damage happens. An heir who receives a Rs 18,000,000 property and does not declare the inheritance shows an Rs 18,000,000 increase in wealth that their declared income cannot possibly fund. The inheritance is not taxable — but the failure to declare it converts a tax-free receipt into an unexplained one.
A notice landed in your IRIS inbox or by post, there is a date on it, and you do not know what it is asking for.
The records to secure early
This is the part that gets harder with time, and it is worth doing in the first weeks:
- The last filed return and wealth statement. It establishes what the deceased declared owning, and it is the baseline for everything that follows.
- Property acquisition deeds, with dates and prices. These become the cost basis for a gain whenever an heir eventually sells — and reconstructing them later is close to impossible.
- Bank statements and account details for every account, before dormancy processes make access harder.
- Investment and share records, including any held through a broker.
- Business records where the deceased ran a business or was a member of an association of persons.
- Loan and liability documents, which reduce the estate.
- IRIS access, which is where the filing history and any pending notice sit.
What each heir has to do
- Declare the inherited asset in their wealth statement from the year of entitlement. Inheritance is an excellent explanation for an increase in net worth — provided it is evidenced.
- Keep the succession documents — death certificate, succession or heirship record, and the mutation showing entitlement.
- Declare income the asset produces. Rent from an inherited property is taxable from the point of entitlement, with section 155 withholding where the tenant is a prescribed person — rental income.
- Establish the cost basis for a future gain now, while the estate records exist — inherited property.
- Sort the mutation record to reflect actual entitlement, before there is a buyer rather than while there is one.
Where the deceased ran a business
A business complicates the position considerably, because it does not stop when the owner does:
- A sole proprietorship has no separate legal existence, so the business and the person are the same taxpayer. Trading that continues after death needs a decision about whose income it now is, and continuing to invoice under the deceased registration is not a solution.
- An association of persons raises questions about whether the AOP continues, what happens to the deceased share, and what the deed says — often nothing, which is why the deed matters — AOP taxation.
- A company continues as a separate legal person. The shares form part of the estate, and for a single member company the nomination determines who acts in the interim — single member companies.
- Employees, suppliers and registrations all need someone with authority to act, which is a reason to establish the representative role formally rather than informally.
In each case the question to settle first is who has authority to act, because nothing else can be done properly until that is clear.
If the deceased affairs were not in order
This is common and it needs advice rather than initiative. An asset entering an heir wealth statement that never appeared in the deceased declarations raises a question about its history and funding, and the right approach depends on the years involved, the amounts, and whether any proceeding exists.
Handled deliberately at the outset, with the position quantified before anything is filed or distributed, it is usually manageable. Handled by improvising figures on an heir return, it is not. Tell us the date of death and whether the deceased was filing before anything is submitted.
Sources
This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.
Questions people also ask
Who is responsible for a deceased person tax affairs?
The legal representative, which is generally the person administering the estate — an executor, administrator or the heirs acting collectively depending on the circumstances. Responsibility attaches to that role rather than to the family generally, and it covers the deceased outstanding position rather than the heirs own affairs.
Do we have to file for years the deceased never filed?
If returns were due and never filed, that position does not disappear. It generally has to be dealt with as part of settling the affairs, and it often has to be resolved before assets can be transferred cleanly. Establish which years are open before distributing anything, because a distribution made ahead of the position being settled creates difficulty for everyone.
Is there inheritance tax on what we receive?
Pakistan has no estate duty or inheritance tax, so receiving property by succession is not itself a taxable acquisition. What arises for an heir is downstream — declaring the asset in their own wealth statement, tax on any income it produces, and a capital gains position when it is eventually sold.
Can we transfer property before the tax position is settled?
Practically it is often difficult, and it is usually unwise even where possible. Transfers can require the deceased affairs to be in order, and moving assets while liabilities remain unresolved can leave the representative personally exposed. Sort the sequence with advice rather than moving assets first and dealing with tax afterwards.
What happens to a refund the deceased was owed?
A refund due to the deceased forms part of the estate rather than belonging to whoever files. It has to be claimed through the proper process by the representative and then distributed according to the succession. Do not treat it as belonging to the person who did the paperwork.
Send the tax year and the transaction or filing involved, and we will tell you what is actually required.
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