ARTICLE · 15 AUGUST 2012

CGT Consequences for a Will

Makinson d'Apice Lawyers

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Any capital gain is rolled over on death and CGT will only be payable if and when the beneficiary disposes of the asset.

AustraliaTax

Summary - Capital Gains Tax (CGT) was introduced on 20 September 1985 and is sometimes described as a "back door death duty". Is this so?

Death is not a chargeable event and a beneficiary inherits the deceased's cost base i.e. the price the deceased paid for the asset. If the asset was purchased prior to 20 September 1985, the cost base is the open market value of the property at the date of death. Thus, any accrued gain is ignored due to the uplift in value. Contrast, where an asset is acquired post 20 September 1985; here the cost base is the deceased's purchase price. Any gain is rolled over on death and CGT will only be payable if and when the beneficiary disposes of the asset.

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