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.
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.