I am Australian and inherited a property in the UK in March 2021 I am selling it for less than the valuation when I inherited it. I did not have to pay inheritance tax in the UK as it was under the threshold and will not have to pay capital gains tax in the UK as I will be making a loss of around $60,000. Will I have to pay tax in Australia? Do I declare it in Australia and if so how? thanks
Hello there @Jillo2315,
You will need to report the sale even if it is a loss. You can do this on your Australian individual tax return. This is because you can apply losses to other capital gains or even carry them forward.
There will be math involved to figure out your loss. All the calculations must be changed into Australian dollars. You will need to use the conversion rate that was current at the time of each event.
These calculations can be a little tricky so you can use the instructions or calculators on our cost base of assets webpage.
Also check the cost base of inherited assets to make sure you are starting with the right figures.
You will need to work out:
A) The cost base of the asset (The value of the asset)
B) The reduced cost base of the asset (Amount A minus deductable costs)
C) The capital proceeds from the sale of the asset (what the asset sold for)
A gain or a loss is figured out by subtracting amount C from amount B.
After you've done the math if you made a gain (it can happen), You may be entitled to a partial or full reduction of Capital gains tax. You should look at our inherited property and CGT page. This will help you figure out if the sale is exempt.
If exempt you still report it and claim the exemption on the return.
Hello there @Jillo2315,
You will need to report the sale even if it is a loss. You can do this on your Australian individual tax return. This is because you can apply losses to other capital gains or even carry them forward.
There will be math involved to figure out your loss. All the calculations must be changed into Australian dollars. You will need to use the conversion rate that was current at the time of each event.
These calculations can be a little tricky so you can use the instructions or calculators on our cost base of assets webpage.
Also check the cost base of inherited assets to make sure you are starting with the right figures.
You will need to work out:
A) The cost base of the asset (The value of the asset)
B) The reduced cost base of the asset (Amount A minus deductable costs)
C) The capital proceeds from the sale of the asset (what the asset sold for)
A gain or a loss is figured out by subtracting amount C from amount B.
After you've done the math if you made a gain (it can happen), You may be entitled to a partial or full reduction of Capital gains tax. You should look at our inherited property and CGT page. This will help you figure out if the sale is exempt.
If exempt you still report it and claim the exemption on the return.
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time
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