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QLD Is There Capital Gains Tax on Inheritance Property?

Discussion in 'Wills and Estate Planning Law Forum' started by Dwsaville, 16 September 2016.

  1. Dwsaville

    Dwsaville Member

    16 September 2016
    Likes Received:
    My brother and I are the beneficieries of our parents family home. My husband and myself want to buy my brother's share of the property and make it our family home.

    My question is, are there any taxes/duties/ costs relating to this purchase from my brother? I realize that there are no death duties on the inheritance. I think that stamp duty is exempt but am not sure about Capital Gains tax.

    My parents owned the house for over 30 years.

    Hoping you can help me

    Kindest Regards
  2. Tim W

    Tim W Lawyer
    LawTap Verified Lawyer

    28 April 2014
    Likes Received:
    In these remarks, I am assuming here that there is a valid will
    (if the sale is part of an intestacy then it's a little more complex).

    I am also assuming that the legacy debts, bills etc, and the funeral costs,
    can be settled/met without the need to sell the house to raise cash.

    I am also assuming that your brother is OK with selling you his share of the house.
    I say this because (neither of) you has a right to buy out the other,
    Understand also (if relevant) that the executor has a duty to get the best price,
    and so has no duty to sell to you at a below-market price.

    Capital Gains Tax is only payable by the person ("tax entity") making the gain.
    and is only payable once the gain is made.
    There are a variety of CGT discounts, or even exemptions,
    which may be in play when a house is inherited.
    There's some good info from the ATO here.

    As far as the transactions go, exactly what happens depends in part
    on what stage things are up to with the estate:
    • For example, does the will say anything about options for the beneficiaries to buy, sell, or renounce gifts?
    • And/or does it specify what form of tenancy is to apply to the inherited house (Joint Tenants, or Tenants In Common?
      (or, being Queensland, even time share!)).
    • Has there been any transfer of property so far?)
    The situation you describe - one beneficiary agreeing to sell their share of an asset
    (such as an inherited house) to somebody else, is not uncommon.
    That said, although it may not seem so, it can be quite a complex (set of) transaction(s).
    So, I encourage you to see a solicitor* to get "the deal" set up the way you want it,
    which, if I understand correctly, could include,
    • everyone understanding and agreeing to the deal
    • avoiding any partial intestacy
    • clear title for you
    • a sensible amount of cash for him
    • no more tax than necessary.

    * Given the will and the tax questions, this is not a job for a mere conveyancer.
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