Inheritance tax in Australia

We’re often asked if there is an inheritance tax in Australia. The good news is there isn’t one. So, if you thought you might be left with a large tax bill when you inherit property, cash or other assets, you relax. However, there are a few things to keep in mind.

Capital Gains Tax (CGT)

While there’s no inheritance tax, if you inherit an asset and later sell it, you might be subject to CGT on any profit made from the sale. Remember that if the asset was your main residence, you may be exempt from CGT.

State Taxes

Some states may have their own taxes or duties related to estates, but this varies widely. It’s worth checking the specific regulations in the state where the deceased lived.

Debts and Liabilities

When someone passes away, their debts don’t just vanish. The estate is responsible for settling any outstanding debts before the inheritance is distributed.

Will and Estate Planning

It’s crucial for individuals to have a clear will and estate plan to ensure that their assets are distributed according to their wishes and to minimise any potential tax implications.

So, while you might not have to worry about an inheritance tax, there are still some financial considerations to keep in mind. If you need help navigating this topic or have other questions, simply contact me paul@congdonfuzi.com.au