Do You Pay Tax on Inheritance?

In Australia, beneficiaries don’t face gift or inheritance taxes, yet they still have important tax duties to fulfill, do you pay tax on inheritance? Here’s a comprehensive guide to understanding and managing these obligations smoothly

  1. Superannuation Death Benefits: Reach out to the superannuation fund of the deceased if you anticipate receiving a superannuation death benefit or managing their estate. While the fund will assist in releasing the funds, it’s crucial to be aware of potential tax implications.
  2. Taxation on Superannuation: Superfund death benefits comprise tax-free and taxable elements. Beneficiaries won’t incur tax on the tax-free portion, but tax rules apply to the taxable segment based on factors such as age and dependency.
  3. Capital Gains Tax on Inherited Property: Selling inherited assets may trigger capital gains tax, treated as part of your regular income. It’s essential to report the sale and any income earned from inherited assets accurately in your tax return.
  4. Inheritance Declaration: Beneficiaries must declare their share of trust income, including entitlements and superannuation income streams, in their tax returns. Different regulations apply to non-residents and beneficiaries with legal disabilities.
  5. Seek Professional Guidance: Although Australia doesn’t impose inheritance tax, understanding tax obligations for inherited assets can be intricate. Seeking expert advice, especially during will drafting or estate management, can ensure compliance and minimize tax liabilities.

At WISTax of Northern Beaches, we specialize in assisting individuals with their tax obligations, including those related to inherited assets. Our experienced professionals offer tailored guidance to help you meet all legal requirements seamlessly. Contact us today to address your tax concerns with professionalism and expertise.

Do You  Pay Tax on Inheritance

All WISTAX today for an initial free 15-minute telephone consultation with John and his team on 1800 841 312 if you want to join our fast growing accounting franchisee business