Is there Inheritance Tax in Australia?

The short answer is no. However, there can be taxes payable in other ways.

Capital Gains Tax

The transfer of an asset from the deceased to their estate and then to a beneficiary in accordance with the deceased’s Will does not trigger capital gains tax (CGT). However, the beneficiary will most likely inherit the deceased CGT liability when they dispose of the asset later. For example, the deceased bought a parcel of CBA shares for $30,000 in 2020. When they passed away, the shares were worth $45,000. The beneficiary sells the shares when they are worth $50,000. The capital gain for the beneficiary is $20,000 even though when he inherited them, they were worth $45,000.

If you inherit collectibles from the deceased, these could also be subject to CGT (e.g. artwork, antiques, jewellery, etc purchased for more than $500)

Superannuation Death Benefit Tax

If a beneficiary receives a death benefit from the deceased’s super fund there could be tax to pay on any taxed element of that fund (e.g. employer contributions, income earned by the super fund, etc.). generally, a spouse or a child under 18 doesn’t have to pay the tax but an adult child of the deceased is likely to incur the tax.

 Stamp Duty

Generally, there is only minimal duty paid when transferring property from an estate to a beneficiary. However, in some states and territories there can be stamp duty payable on the transfer of a property from the estate to a beneficiary. This is where the Will doesn’t leave a property to a particular beneficiary. For example, the Will provides for both children to receive 50% each. However, one child wants to keep a property that represents 55% of the deceased estate. They will personally give their sibling some cash to balance it out so they own 100% of the property. In some jurisdictions they will need to pay duty on the extra 5% they inherited, while in others they may need to pay duty on the 50% as they were only entitled to 50% and received 100%.