‘Will my son have to pay CGT on his inheritance when I die?’

Q: I am aged over 65. If my son inherits my investment shares or inherits my investment property, will he need to pay capital gain tax (CGT) immediately? If yes, and he has no money to pay the tax, does this means he has no choice but to sell the shares or property just to pay tax, instead of enjoying his inheritance? What is the best way to help benefit my son? Please kindly advise.

A: Provided the beneficiary is an Australian resident, there are no immediate capital gains tax consequences on death. The beneficiary will receive the assets with the existing capital gains tax liability but no tax is payable unless and until the assets is sold. You can read more about CGT on inherited properties here.

Q: I am the executor of my father’s will and I have two brothers; we are equal beneficiaries. Given I have the original will and only a house and furniture to be divided, do I still require probate? I will have in my possession the death certificate so could I proceed in selling the property? 

A: Assuming the property is in Queensland, where I practice, it will not be necessary to obtain a grant of probate. The original will and death certificate is lodged with the executor’s application for transmission of title and the executor may sell the property from there. If the property is in another state, I would need to have a look at the rules for that state and advise further as each differ slightly.

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