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Taxes on deceased investments and home ppor

Discussion in 'Accounting & Tax' started by Barny, 3rd Nov, 2015.

  1. Barny

    Barny Well-Known Member

    16th Oct, 2015
    Hi peeps, need a little understanding please if possible.
    Writing my last will, and would like to know what taxes or cost are liable to the person you leave investment properties too.
    Would like to leave my ppor and a couple investments to my wife, and one investment that has been fully paid off to my bro.
    Do they need to pay cgt taxes on the investment properties once they receive them or only if they sell?
    The investment property I want to leave my bro has more than doubled over the years and nothing is owing on it. But I don't want to leave it to him if I pass and my wife has to pay the taxes on it before it's transferred, otherwise I'd prefer her to just sell it, pay all taxes and then transfer the remaining funds to him.

    Appreciate the feedback, cheers.
    pinkboy likes this.
  2. Terry_w

    Terry_w Well-Known Member Business Member

    18th Jun, 2015
    None generally. CGT is paid on the subsequent sale. Don't forget to take into account any loans secured on the property - they must be paid for out of the property that secures them unless you specify otherwise.

    If they are non residents there could be issues depending on the type of property you leave them.

    You should seek legal advice. See all my tips on wills in the legal section.
    Barny likes this.
  3. Scott No Mates

    Scott No Mates Well-Known Member

    18th Jun, 2015
    Sydney or NSW or Australia
    AFAIK there's no tax payable upon death nor cgt. Transfer date is your day of passing. Unsure if the cgt liability date is your original purchase date (if post September 1987?) or date of death or what date for cgt exempt purchases.
  4. The beneficiary inherits YOUR cost base (unless any assets are pre-CGT) but CGT is only triggered if and when they sell. Example : Your bro inherits your IP but chooses to live in it. Its then a pro-rata asset if or when he sells it so that your period of ownership is taxable v's his ownership period exempt but the profit is based on price you paid and pro-rata calc needed. You cant make his decisions now.

    Generally speaking if you are intended to bequeath specific assets you need a crystal ball about the future tax issues. You could end up leaving one beneficiary a CGT ladden asset and another has no CGT to worry about. eg wife and home.

    And then there is life insurance / super etc. Super would be taxed if it flows directly or indirectly to your brother but not wife.

    This issue and many more are the realm of solicitors who are best to draft a will. They may ask questions about your brother and suggest strategies to shelter his inheritance from creditors, bankruptcy or a gold digging partner.
    Barny likes this.