There's no death duty nowadays, is there?

Date: Aug 03, 2009
Document Type: Newsletter

Premier Jo Bjelke-Petersen of Queensland has been a rather controversial figure in Australian political history, but one of the lesser known facts about him is that he was responsible for the end of death and estate duties in Australia. For many years both the individual states and the Commonwealth imposed death duties, known as estate duty for the Commonwealth version. Premier Jo abolished death duty in Queensland, and the resultant rush of investment into Queensland led to his lead being followed throughout Australia, so there are no death duties as such in our country.

That does not mean that no revenue at all will be collected by governments following a death - that would probably be too much to hope for! There are three areas in which the State or Federal governments can gain from a deceased estate, and these are superannuation, Capital Gains Tax and stamp duty.

If, following the death of a member, a superannuation fund has moneys to distribute by way of death benefits or from a balance in the deceased member's account, there will be tax payable on any payment other than to a dependant of the deceased, currently at the rate of 15%. Dependants will normally only be a partner, children under eighteen, or adults with a disability, so adult children financially independent will lose 15% of any payment due to them. A consequence of this is that retirees, particularly those in declining health, might need to consider taking money out of superannuation into their own names, but as this might affect pensions or income tax, advice should be sought before taking any action.

Capital Gains Tax (CGT) is imposed on any gain on property acquired after 1984, when it is disposed of, other than limited exemptions such as one's home. However, transferring property to a beneficiary or to an executor is not treated as a disposal. A beneficiary inherits property at the original cost to the deceased, and will become liable for CGT on any gain when he or she disposes of that property. This can, of course, lead to problems in will-drafting and fair treatment of beneficiaries when different properties with varying potential capital gains are being left to different beneficiaries. If an executor sells assets so that cash can be distributed, a liability will exist in respect of capital gains on non-exempt asset sales. This brings to mind one plea on behalf of executors; please keep records of the date and cost of acquisition!

Where a dutiable asset such as real estate is being transferred to a beneficiary pursuant to a will, or as part of a beneficiary's share of an estate, a fixed maximum stamp duty of $50 applies. However, if a beneficiary's share is less than the property's value and the beneficiary has to pay the estate the difference, that difference is liable for stamp duty at normal rates.

So, there may not be any death duties as such, but many estates or beneficiaries will find themselves contributing to government coffers - surprise, surprise!

Bankrupt Estates
Date: May 02, 2010
Can I bequeath my heart?
Date: Dec 13, 2011
Can I write my own will?
Date: May 01, 2007
Capacity to make a will
Date: Jun 20, 2014
Caveats in Probate Proceedings
Date: Jul 24, 2014
Choosing your executor
Date: May 09, 2012
Coercion in making a will
Date: Sep 07, 2011
Court Made Wills
Date: Jul 21, 2009
Creating a Living Will
Date: Jun 06, 2011
Do I Need a Power of Attorney?
Date: Nov 01, 2009
Family Provision Overview
Date: Jul 16, 2012
Fixing errors in Wills
Date: Mar 28, 2012
Gambling away inheritance?
Date: Jun 18, 2012
He didn't leave me anything
Date: May 05, 2009
Informal and Stopgap Wills
Date: Nov 26, 2013
Life changes and wills
Date: Mar 12, 2013
Lost Wills
Date: Mar 21, 2014
Moral duty and family provision
Date: Oct 01, 2012
Obtaining Probate
Date: Feb 03, 2011
Organise Organ Donation
Date: Jun 04, 2010
Proper funeral planning
Date: Jan 31, 2013
Security for Costs
Date: Aug 08, 2010
Testamentary Capacity
Date: Apr 01, 2012
The Basics of Estate Planning
Date: Apr 01, 2011
The Curse of the Homemade Will
Date: Sep 18, 2014
The Guardianship Tribunal
Date: Feb 02, 2010
The Problem With Internet Wills
Date: Jun 18, 2014
The Will fundamentals
Date: Apr 05, 2009
What are Powers of Attorney?
Date: Jun 16, 2014
What can a will be written on?
Date: Sep 07, 2011
What is a “Benjamin Order”?
Date: Oct 04, 2013
What is a will?
Date: Jan 01, 2008
When should a will be changed?
Date: Feb 03, 2012
When should I make a will?
Date: Mar 01, 2008
Who will look after your pets?
Date: Nov 15, 2011
Witnessing a will
Date: Sep 07, 2011
Back to Publication List