Capital Gains Tax Australia Probate -

August 7, 2004
Tomas Harnin

Capital Gains Tax Australia probate refers to when a deceased person leaves a will, the executor of the will needs to obtain a probate. This probate facilitates the executor of the will to distribute the assets as per the will. Probate is the Supreme Court's authority to the executor to administer the deceased estate.

When assets of the deceased estate are transferred or sold there may be capital gains taxes pertaining to probate granted in Australia. There are special capital gains tax rules regarding such assets.

An executor cannot distribute the income or assets to the beneficiary of a deceased estate until the debts of the deceased person, including tax liabilities, are determined and probate has been granted.

Although some of the assets can be distributed if the executor of the will is assured that the rest of the deceased estate shall be sufficient to cover any liabilities that may be outstanding on the part of the deceased person.

On the face of it, there are no death duties in Australia but the Income Tax Act 1997 does tax certain income or capital transactions that may arise as a consequence of deceased person's will.

There are many factors that will determine who pays the tax on income derived by the deceased estate and applicable tax rate. If the distribution takes place in the form of a transfer of asset, there may be capital gains tax consequences to the beneficiary.

Capital gains tax needs to be paid by the beneficiary of the will if there is transfer of assets like real estate, stocks, etc. This means that if the deceased person held stocks, shares or owned any property like house, farm, commercial property, etc then the person, in whose name the assets have been transferred as per the will, is liable to pay the capital gains tax to the State or Territory of Australia.