Managing inherited investments: what you need to know

When it comes to inheritances, one key fact to understand is that Australia has no death duties – meaning there are no taxes on a deceased person’s estate based on the value of their assets at the time of death.

Rather, we have a form of “roll-over” whereby there is no taxation of the assets as they pass from the deceased person to their estate (executors) and then onto beneficiaries.

But like musical chairs, it will be the beneficiary who will be left holding the asset and will be subject to capital gains tax (CGT) on its later sale in their hands (unless the asset is exempt from CGT, such as a car or the home of the deceased sold within two years of their death).

But here’s the good news: even though the beneficiary does not pay anything for the inherited asset, in calculating any CGT on its later sale in their hands, they get a “cost base” for this purpose equal to either the cost of the asset to the deceased person or its market value at the date of their death.

Whether they get the deceased person’s cost or market value will depend on whether the deceased acquired the asset before or after 20 September 1985 (when the CGT regime was introduced into Australia).

If the deceased acquired the asset after 20 September 1985, they will get the cost base of the deceased. In other words, as well as inheriting the asset, they will inherit the deceased’s cost base, ie, they will “step into the shoes” of the deceased.

Otherwise, if the deceased acquired the asset before 20 September 1985, then they will get a cost base for the asset equal to its market value at the date of the deceased’s death (because the asset is being brought into the CGT system for the first time).

Either way, the outcome is good: despite the beneficiary paying nothing for the inherited asset, they get some sort of cost for it – which means less CGT will be paid on its sale.

Furthermore, if the asset has been owned for more than 12 months by the beneficiary (including the deceased’s ownership in the case of an asset acquired after 20 September 1985), then the beneficiary will get the benefit of the 50% CGT discount in calculating the assessable.

All this means is that in the case of inherited assets which the deceased acquired after 20 September 1985, it will be important for the deceased to have kept records of their cost (and their date of acquisition) – and in the case of inherited assets like a big parcel of shares it can be very messy if no records have been kept by the deceased or they are not readily available.

So, come and have a chat to us if you have inherited – or are going to inherit – assets such as shares and other investments. We can help make this easier for you - and maximise the tax outcomes.

< Older Post

Newer Post >

Previous Blog Posts:

Surviving (and maybe avoiding) an ATO audit

By Brad Dickfos • January 27, 2026

This article focuses on self-employed clients. If you’re a salary earner or retiree, you might find one of our other blogs more helpful.

The 50% CGT discount: More than meets the eye

By Brad Dickfos • January 9, 2026

There is much in the media about how the 50% capital gains tax (CGT) discount has contributed to the housing affordability problem in Australia (although no doubt the problem is a lot more complex than attributing it mainly to any taxation measure or measures).

Could you be missing out on thousands in lost super?

By Brad Dickfos • December 18, 2025

Most of us keep a close eye on our bank accounts. But superannuation can be easier to lose track of, especially if you’ve changed jobs, moved house, changed your name, or simply set up a new fund and assumed everything followed you. That’s why the Australian Taxation Office (ATO) has issued a timely reminder. There is now $18.9 billion in lost and unclaimed super sitting across Australia. That’s up $1.1 billion since 2024 and spread across just under 7.3 million accounts. In other words, a lot of Australians have retirement savings that aren’t currently working for them and some of it could be yours. What “lost” or “unclaimed” super actually means Super doesn’t vanish, but it can go missing from your radar. It typically happens when an account becomes inactive and your super fund can’t contact you, or when you end up with multiple funds over the years. The ATO also holds certain amounts of super on behalf of individuals, for example, small inactive balances that have been transferred to the ATO, or other unclaimed amounts. The average amount of lost or unclaimed super is around $2,590 per person. That might not sound life-changing today, but over time it can grow into tens of thousands by retirement. A special note if you have an SMSF If you have an SMSF, this ATO update is particularly worth paying attention to. When you established your SMSF, you might have transferred most of your super across, but kept some behind, for example, to retain insurance cover through another fund. That means there could still be older super accounts from past jobs or retail/industry funds sitting in your name. The ATO is urging SMSF members to do a check, because a share of the $18.9 billion in lost and unclaimed super might be yours and could be rolled into your SMSF. One important practical tip is that if you locate lost super and want to move it into your SMSF, but your SMSF doesn’t show up as a transfer option in ATO online services, it’s often due to the fund’s compliance status. Take a moment to confirm your SMSF is listed as “complying” or “registered” on Super Fund Lookup. How to check for lost super (it only takes minutes) The ATO has made this super simple (pun intended!). You can: 1. Log in to myGov and go to ATO online services 2. Navigate to the Super section to view: Super held by the ATO Any lost or unclaimed accounts 3. Request a transfer to an eligible super account. Even if you don’t find anything, you’ll at least know everything is where it should be. Simple habits that help you stay on top of super Finding lost super is great but preventing it from happening at all is even better. A few easy habits can make a big difference: Keep your details up to date with your fund and the ATO so you stay contactable. Check whether you’ve got more than one account. Multiple accounts can mean multiple fees and duplicated insurance Consider consolidating if it suits your situation. Fewer accounts can mean lower fees and easier management but just be sure to check any insurance you might lose before rolling over Read your annual statement. It’s a quick way to confirm contributions, fees, returns, investment mix and beneficiaries. Why acting now matters Since 2022, the ATO has already reunited Australians with about $5.5 billion in previously unclaimed super. But there’s still nearly $19 billion waiting to be found. A few minutes today could translate into a healthier retirement balance later. It’s easy to put super in the “deal with it later” basket, but it’s still your hard-earned money. If you want a hand finding lost super, combining accounts, or moving money into your SMSF, reach out to us. We can guide you through the steps and make sure you’re able to claim any lost super without any hassles.