The estate will be 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 will be liable for income tax on that income.

Capital gains tax is not attracted merely because of death but could be incurred if the estate or a beneficiary subsequently sells an estate asset and there is a capital profit on the sale. The law here is complex and advice should be taken from an accountant or lawyer as to liability in any particular case (Div. 128 Income Tax Assessment Act 1997 (Cth)).