Author: _Hoggie(Initiate)Initiate 11 Sept 2021
My father passed away leaving properties overseas. One of the properties have been sold and a lump sum will be transferred from overseas.
I understand that there is no inhertiance tax but capital gains will applicable. However, due to the short duration between when we legally received it and selling it, I don't think there will be much in captial gains, and also we will be paying any applicable captial gains overseas already.
What is the process and documenation that might be required. Do I need to delcare the inheritance to the ATO so they are aware? Letting them know where the lump sum transferred from overseas came from? Also what type of documentation will be required, as everything will need to be translated.
Also, how are capital gains from overseas property calcuated? This one in question and remaining ones will be have brought decades ago probably in the 80s or early 90s.
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5 replies
Most helpful replyATO Certified Response
Author: JasonT(Community Support)Community Support ATO Certified Response14 Sept 2021
Hi @Hoggie,
The property may be exempt from CGT, or at least partially exempt. Please work through our information on inherited property and CGT. If you find the property is fully exempt, there's no gain to report on your return. If a partial exemption or no exemption applies, use this info to work out the capital gain to report.
You'll need to convert all foreign income, deductions and foreign tax paid into Australian dollars for tax purposes.
Tax paid through the foreign tax system will entitle you to a Foreign income tax offset (FITO).
These are the records to keep.
Due to the complexity of inherited foreign assets and CGT, you could make an early engagement request for tailored advice to assist you.
Author: _Hoggie(Initiate)Initiate 14 Sept 2021
Thanks.
The intitial property in question is actually just a piece of land (industrially zoned) with no buildings (never had any). So its not exempt?
Overall, I think I will need to engage an accountant for the returns next year in regards to the CGT. There are more complexities, he passed away two years ago with no will, and beneficiaries in multiple countries plus the pandemic delays. We actually only got the titles last month.
But in the meantime, beside the records and documentation required, is there any action I need to undertake now?
Author: JodieR_ATO(Community Support)Community Support 17 Sept 2021
Hi @Hoggie,
Thank you for the update. It sounds like what you've advised, there will be a capital gain to report as it's land and outside the 2yr period. Depending on when you sell the capital asset determines when you need to declare it here.
Records to keep is listed on our website.
Author: _Hoggie(Initiate)Initiate 17 Sept 2021
Thanks, I'll find an accountant and let them corropond with the overseas laywer we have been using to make sure we get the right documents. With none of us actually being there, its probably easier this way to avoid more delays.
Author: JodieR_ATO(Community Support)Community Support 20 Sept 2021
Hi @Hoggie,
Sounds like a plan. All the best with it, and feel free to post any further questions you may have here.
