In this episode, the confusing issue of capital gains tax and how it works for your beneficiaries when you die. It can be tricky to understand in what circumstances CGT is payable.
Veteran financial writer Noel Whittaker explains that capital gains tax isn’t payable on your assets when you die. In simple terms, you don’t pay CGT until you or the beneficiary of your estate sells the assets. You are in effect inheriting the obligation to pay CGT. But your beneficiaries pay it when they sell the asset, most commonly shares.
There are rules around property, but in many cases, CGT isn’t payable if you sell the primary residence within two years.
Noel Whittaker suggests you look at your will and consider whether selling your shares and leaving cash to your beneficiaries may be preferable, depending on how you want to leave your estate.
More information:
- ATO : Inherited assets and Capital Gains Tax
- ATO: CGT and inherited assets
- Canstar: Property and CGT
- Commbank: Quick Guide to CGT
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