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SusanE(I'm new)I'm new
29 Oct 2024

My mother passed away in September 2022. My sister and I inherited her shares, but did not want to retain them. We sold them this year and I’m trying to work out the cost base.


The advice on the ATO website is a bit… circular. It says that the cost base for shares bought after Sep 1985 is the deceased’s cost base at the time of death. What does this mean in practice? Is it the value of shares on the day my mum died or the original purchase price of the shares?


If it’s the latter, what difference does the date of death make in the calculations? It seems irrelevant at that point.

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348 views
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Most helpful replyATO Certified Response

Taxduck(Taxicorn)Taxicorn
ATO Certified Response29 Oct 2024

Original purchase price for post September 1985 acquired shares. So your late mother's cost base, which would be when they were acquired by your mother.

Date of death if acquired pre September 1985.

Date of death is the date when you acquired the shares. CGT is ignored when you inherit the shares and only applies when you dispose of them.

Deceased estates | Australian Taxation Office

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sydauthor(Master)Master
29 Oct 2024

My sympathies, death and taxes aren't a pleasant combo.


If I can understand what it's trying to say, is this:


Let's say Company A's share price was $100 per share on the day of your mother's death and she had 10 shares in Company A so they were worth $1000 in 2022.


Now, you sold Company A's shares this year, so let's say Company A's share price was $200 on 1st of March 2024 when you sold them. So the value of those 10 shares were $2000.


The difference is $1000 between the date of her death (when you inherited the shares) and the date you sold off the shares. It's the $1000 profit that you need to report on. With CGT reduction (because you held them for more than a year), that is reduced to $500.


Of course, I can be wrong but that's how I understand their guidelines on calculating the cost base. Your shares should be associated with your TFN and when I sold some shares this year, the ATO already had that pre-filled them in the CGT section of my tax return and then I had to work out the cost base using websites that had historical share price data or go through my emails to find the contracts that listed the cost price when I first bought them.

Most helpful replyATO Certified Response

Taxduck(Taxicorn)Taxicorn
ATO Certified Response29 Oct 2024

Original purchase price for post September 1985 acquired shares. So your late mother's cost base, which would be when they were acquired by your mother.

Date of death if acquired pre September 1985.

Date of death is the date when you acquired the shares. CGT is ignored when you inherit the shares and only applies when you dispose of them.

Deceased estates | Australian Taxation Office

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How do i calculate the CGT on the sale of inherited shares? | ATO Community