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Bankruptcy and tax returns

When you become bankrupt, you have some obligations when it comes to your tax returns – just as you did prior to bankruptcy.

You must inform your trustee when you receive a tax return. If your trustee is the Official Trustee, you can use the below online form to let us know if you have received an ATO Notice of Assessment. 

Can I keep my tax refund?

It depends on your circumstances. You must inform your trustee when you receive your tax refund. You also need to provide a copy of your ATO Notice of Assessment. It’s important to not spend your tax refund until your trustee makes an assessment and informs you if they have a claim in the refund. 

Your trustee calculates the following and notifies you of the outcome:

  • Refunds for income you earn before you enter bankruptcy is an asset your trustee can claim.
  • Refunds for income you earn after you enter bankruptcy form part of your assessable income for compulsory payments. If your assessable income exceeds a set amount you may need to make compulsory payments. 

You still need to lodge your tax returns as your obligations to the ATO remain during bankruptcy.

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