Does bequeathing my shares in my will incur capital gains tax?

October 28, 2026 — 5:00am

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You recently wrote that transferring shares bequeathed under a will could trigger a capital gains tax event after July 1, 2027. My financial adviser says this is not the case. Has the proposed legislation changed since August?

Julia Hartman of BANTACS accountants group says it could be argued that we are both right, such is the chaos surrounding the budget changes. Under the current legislation, if you die after July 1, 2027, your estate will be liable for tax on deferred capital gains accrued up to that date.

This is because death is treated as a realisation event for pre-2027 gains, which would therefore be included in your date-of-death tax return. The problem arises from the rules that effectively deem assets to have been sold and reacquired at market value on July 1, 2027, with the resulting capital gains tax deferred.

The normal rollover provisions do not apply because you were alive when those gains were calculated and deferred.

In the explanatory memorandum accompanying the second tranche of legislation, released in August, the government acknowledged problems with the rollover provisions and indicated that they would be addressed in future amendments.

However, when the third tranche was released in October, the problem remained unresolved, with another assurance that it would be fixed later. With the deadline now just eight months away, and the necessary amendments likely to be complex, Julia is understandably sceptical.

Your adviser may have more faith in the........

© The Sydney Morning Herald