Coming into an inheritance

February 10th 2022 | Categories: Estate Planning & Inheritance |

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Deciding how to best use this money can be quite overwhelming. Pay off the mortgage, take a holiday or purchase a new car… they’re all great ideas. But before you come to a decision, read through the below considerations.

 

Find out how we can help you select the most appropriate investments for the enhancement and protection of your wealth, based on your personal needs…

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Some ways to use the windfall

 

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Remember the two-year window!

If on the other hand, you inherited the family home, the good news is there is no inheritance tax in Australia. But the bad news is there is Capital Gains Tax (CGT). You have to watch out for CGT if you are acquiring an asset as a result of a will. The most common assets are property and shares.

There are ways to avoid CGT. If for example, your mother was living in the family home up until her death and the home wasn’t used to produce an income, then you don’t have to pay CGT if you:

If you hold on to the property for more than two years, rent it out, and then sell it at a later date, CGT will apply to the difference between the purchase value and the sale price. So, if it was worth say $150,000 back in 1987 and you sell it for $500,000, then you will be liable for capital gains on 50% of the $350,000 nominal capital gain.

 

We can help you to understand these options in more detail and make the most of your inheritance, contact us today to find out more.

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What you need to know

This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.