CGT rules-inherited investment property and shares

(Newbie)Newbie

14 Oct 2025

We are getting an accountant to advise too, but are trying to understand the rules.

When we beneficiaries of inherited CGT assets (investment property worth $500k and shares worth $60k) sell them, does it make any difference to the CGT liability amounts:

a) whether we beneficiaries sell them and pay the CGT, or the estate does? Is it the same CGT liability and 50% discount for the investment property regardless, or eg do beneficiaries only incur CGT liability from the time of inheritance, not from when parents' purchased it?

b) when we sell- straightaway, or is there a "hold for longer than 12 months" rule for us to get CGT discount?

Then, is it potentially tax effective to stagger the sales of the investment property and shares across FYs to flatten out the sudden increases to our taxable incomes?

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Taxduck

(Taxicorn)Taxicorn

14 Oct 2025

Transfer of assets (including property) to either the legal personal representative (LPR) of the estate, or a beneficiary is not a CGT event. If either the beneficiary or the LPR sells the assets that is when the CGT event occurs.

It can't be the same CGT liability as CGT is not a tax. CGT is taxable income, added to other taxable income then the total taxable income is taxed. (either at normal individual rates, or trust tax return rates) See below

Tax rates – deceased estate | Australian Taxation Office

If the LPR sells then it would be the estate that reports the event on a trust tax return and pays any tax. If the beneficiary sells then the beneficiary reports the CGT event on their individual tax return and pays any tax.

The estate has the benefit of the tax free threshold ($18,200) for the first 3 years.

CGT discount is available if the asset is a post CGT asset (acquired by deceased after 20 September 1985). If acquired pre CGT then the asset would need to be held for at least 12 months from date of death.

Cost base of inherited assets | Australian Taxation Office

See CGT discount - 12 month ownership requirement

CGT discount | Australian Taxation Office