Executor seeking advice for share portfolio

 Author: RachelATO(Community Moderator)Community Moderator

ATO Certified Response20 May 2025

Hi @Executor2025,

We can't provide strategies to maximise the value of your estate. The terms and conditions of the will determine how you administer and manage the affairs of the estate. Here's the advice we received to each of your questions.

1. If you transfer the entire share portfolio to the NFP organisation, CGT event K3 applies. The CGT event will apply to the deceased directly (as if they'd sold the property to the NFP), for its market value at the time of their passing. If you transfer the entire portfolio to the NFP, you include the capital gain in the deceased date of death return.

2 (a). The Tax Act doesn't prescribe a time limit for you to sell the shares. Depending on the terms of the will and stage of administration of the estate, the capital gain may be made by a beneficiary rather than the executor, when the executors sell the asset.

2 (b). We don't prescribe rules on how much of the share portfolio you sell in a single financial year. You should check the will to see if there are conditions for managing the share portfolio.

2 (c). Our income tax system works on self-assessment. This means, we accept the information you give us is complete and accurate. The estate derives income when it sells the shares (and makes a capital gain or loss) and receives dividends from the share portfolio.

You can read more about when and how to lodge returns for a deceased estate. The estate has the tax-free threshold of an individual for the first 3 income years. The first income year of the estate starts the day after the person died and ends on the next 30 June. For income year 4 and later income years, you'll need to lodge a trust tax return if the deceased estate earns an income.

For more information on the tax rates on the estate, go to Tax rates – deceased estate and Trusts.

For more information on capital gain or capital loss, go to Calculating your CGT. You need to determine the cost base or reduced cost base of the shares in the portfolio using with the rules set out in table to s128-15(4). The estate is entitled to a CGT discount if it has complied with the requirements.

If the estate derived a franked dividend, the estate is entitled to the franking credits if the Integrity rules are met. If there's no obligation to lodge but the estate wishes to claim the franking credit, it will need to lodge a trust return. For more information, go to Refund of franking credits for individuals.