CGT - cost base of overseas shares

Discussion in 'Accounting & Tax' started by FireDragon, 6th Jun, 2020.

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  1. FireDragon

    FireDragon Well-Known Member

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    I recently inherited some overseas shares from a relative who passed away last year and he was an Australian citizen but non-resident since 20 years ago.

    Just wondering what will be the cost base if I sell the shares?

    Thanks in advance.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    market value as of the date of death - assuming you are a tax resident
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Actually that might be wrong. It is the cost base of the deceased person usually - being a non-resident might not change this or it might
     
  4. FireDragon

    FireDragon Well-Known Member

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    This means the cost base should be the original purchase price of the shares even if the deceased person was a non-resident?
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Normally the cost base would be the cost base of the deceased - which would be the purchase price and any brokerage generally.
    Being foreign shares doesn't change this I think.

    They weren't acquired by the deceased prior to CGT in 1985 were they?

    Does the executor have the power to sell them and give you the cash?
     
  6. FireDragon

    FireDragon Well-Known Member

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    The shares were acquired after the deceased became a non-resident which was probably around year 2000.

    Yes, the executor can sell the shares and give me cash. Does the executor need to pay any CGT in this case?
     
  7. Trainee

    Trainee Well-Known Member

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    CGT rules for non resident estates?
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Is the estate a resident trust?
     
  9. FireDragon

    FireDragon Well-Known Member

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    No, the shares are just publicly listed company shares.
     
  10. FireDragon

    FireDragon Well-Known Member

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    Hi Mike, the shares were acquired around 2000. The deceased was an Australian citizen but became a non-resident 20 years ago. In this case what will be the cost base?
     
  11. Mike A

    Mike A Accountant Business Member

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    ahh ok aussie citizen then became non resident and now inherited...much more complex.
     
  12. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Where is the executor?
     
  13. FireDragon

    FireDragon Well-Known Member

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    The executor is an Australian resident. Am I correct that the executor is just selling the shares on behalf of the deceased (who was a non-resident), so there should be no CGT involved?
     
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    It is a resident trust for tax. He should have appointed a non-resident executor for those shares perhaps. Greenhills case might apply
     
  15. FireDragon

    FireDragon Well-Known Member

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    I am a bit confused... I don't think there was any trust setup. Do you have some more details regarding Greenhills case?
     
  16. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    deceased estates are actually trusts
     
  17. FireDragon

    FireDragon Well-Known Member

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  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    no I don't think so.

    You will need to consider 2 things
    a) passing of the shares from the deceased to the LPR, and
    b) passing from the LPR to you.
     
  19. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    A non-resident deceased estate that sells shares to give the proceeds to a beneficicary would not include a capital gain on listed AU shares as Net trust Income in an Australian return if one were to be prepared. I dont beleive it would need to.

    If a non-resident deceased estate transfers the shares to a resident beneficiary the costbase of the shares is the historical costbase of the shares adjusted for the exchange rate on the date of death. The CGT on shares and the forex gain or loss as separate tax events
     
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  20. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    if only there was a second will with a non-resident executor - not always possible but there would have been no tax payable in Australia.