Choosing an accountant - Overseas Inheritance, IPs, returns - VIC

Hi all,

My partner has had her grandma pass away last year in New Zealand where we are both from(been in Aus for 4 years). As part of the will, she is to inherit about 25% of of the estate with the remaining 75% going to her father (who's also the executor of the will). The bulk of the estate was in the grandma's house which they sold late last year and my partner has been informed she will be getting around 200k and is expecting a call from a lawyer to organise the transfer of this any day.

Our plan is to stick this in a term deposit whilst we do some learning but our rough idea is to buy a investment property later in the year as this was something we were planning on doing in the future anyway, this has just brought things around alot faster then we were expecting.

Before we get into the property stuff though, we are concerned around her tax obligations with the initial 200k, I understand inheritance isn't taxed in Australia but as the bulk of the money is from the sale of a property, i have read conflicting things online if this is actually subject to GC tax..

We'd like to talk to a professional about this but neither of us have ever dealt with accountants or lawyers before and are unsure where to start. Ideally we'd like to find someone local that we can sit down with to discuss and also someone we can deal with in the future regarding property investment and also our tax returns.. (which we have always done ourselves up until this point but I assume are going to become more complicated going forward)

Where do we start in terms of finding someone we can trust and build a relationship with? We don't have many friends here and none that could recommend someone so that is out of the question.

We want to take the whole process of investing slowly and carefully and are prepared to put the effort in to educate ourselves but this side of things is stressing us out as we are scared of being taken advantage of.

We are in inner West Melbourne - Yarraville

Thanks!

 

Did you receive the house or the cash?

It might be the estate that wears the tax if the executor sold it.

 

Good point, I think she just receives the cash and the estate was the one that sold the house, will need to confirm that though.

 

Inheritance of cash proceeds from an estate has NO TAX CONSEQUENCES. No CGT and no income tax other than on what the $200K earns in the future. And there wont be a NZ tax concern either. Its quite simple. One tip is to hang onto details of the inheritance from the lawyer (eg letters) as Austrack have a knack of asking your to explain offshore funds a year or two down the track (they can be slow so hard to see the terrorism impact to be honest)

Do you have a home loan ?? If so talk to your lender about a offset account for leaving the $$ in rather than on deposit which will reduce the loan interest on your home.AND means no tax on the benefit either.

 

Thanks Paul & Terry. No home loan currently, we are renting.

Any suggestions on finding an accountant?

 

Try
Pricefinancial.com.au
Or
Loanstructuring.com.au

As good starting points

 

Terry is a broker and lawyer so loanstructuring.com.au wont be much help

 

AUSTRAC isnt something to be scared of. Had many clients who have dealt with them.

Once probate has been granted would simply need to show AUSTRAC that you were a beneficiary of the estate and explain it if they asked why those funds were coming in. I dont see it as an issue to be honest.

 

Nothing to fear . Copy of will / letter etc. Done. Problems more likely if its not in English or a country where its all done informally. Saw one from macedonia and they ran client through wringer. Like Borats village in my mind.

 

Thanks all, that's put our minds at ease. We'll confirm with the lawyer that it was the estate that sold the house and that the house was never in her name, as long as that's the case then we'll transfer the money over to aus.

One last question in regards to transferring the money to aus - We both send money back and forth between nz and aus quite often and we have always used a forex broker(currencyonline) as the rates are better than the banks, we plan on doing the same with this money.

The currencyonline account is in my name, and when we transfer the money currently we just do it all through my bank accounts which are attached to the currencyonline account and then I transfer the funds to her nz/aus bank account once the transfers done - that's all good since it's currently just a few hundred at a time but with this large amount is she better to set up her own currency online account? From memory it was a bit of a process with scanning id's & documents. The other option is I can add her aus bank account to my currencyonline account, she uses my login and does the transfer that way, that way it never touches my account but I guess it's technically going through my currency online account?

That seems like the easiest way but want to make sure it's not going to complicate things with the ato further down the line

Thanks again

 

There are various implications when money changes hands...

 

Thank you Terry

 

Other than the risks of someone giving another person access to personal assets the issue of using a different account poses no serious concerns. If Austrack review it later they would ask you for information and you would explain you assisted your partner with a personal transfer and provide the relevant paperwork.