Is there inheritance tax in Australia?
Death duties in Australia were abolished in 1979. However, if an asset is acquired as a result of distribution of a will, there may be a capital gains consequence. If you are in inheriting from a person who died after 1985, there are special rules relating to the records that need to be keep in order to protect any possible investments which you may have. This is because a pre CGT asset which is defined as being acquired by the deceased person needs to have its market value recorded at the date of the death of the person plus the costs of the trustee. This amount is then used as the cost to you of the CGT asset. Normally it is necessary to obtain an independent valuation for this purpose if an authoritative valuation cannot be obtained from the executor of the estate. The reason that this is so important is that if you do not have any records in relation to the cost of the property to the deceased, even if the property was the primary residence of the deceased, then you will not be able to claim a CGT deduction unless the original cost is properly documents and the value of this could be hundreds of thousands of dollars.
How can I legally minimise inheritance tax?
This is a complicated question which will relate to your specific circumstances and the circumstances of the person who you are inheriting from. There are a complicated set of rules regarding capital gains tax and how it applies to inheritance which you will need the help of a professional to analyse so that you can position yourself to the greatest advantage for tax purposes but still be within the legal limits of what is allowable under the tax law. We have taxation solicitors avaialble online now who can assist you with these types of legal questions. Simply post your question about taxation below or to the contact form to the right. A lawyer will get back to you as soon as possible.