Tax Bites

A benefit of death – but don’t rush for it

16th August 2016

  • Where an individual that owns all the shares in a company dies, and those shares are pre-CGT shares, then the beneficiary that inherits those shares should obtain a market value cost base in the shares as at the date of death.
  • But this doesn’t affect the tax cost of the company’s underlying assets.
  • However, with a restructure and the formation of a tax consolidated group, the tax cost of the company’s underlying assets should generally be reset to market value (approx).
  • Given this would apply to a company that has been around since at least 19 September 1985, this could result in massive uplifts in the tax cost of those underlying assets.
  • Whilst this might be a clear benefit, it isn’t worth dying for.
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About Tax Bites

Tax Bites are general in nature and are not a substitute for specific advice. They are the opinion of Tax Advisory Specialists, and the ATO or the Courts may take a different view. They are not updated for changes in the law or the interpretation of the law since publication.


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