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Tiffany M.
Tiffany M.
Wangaratta, VIC

My mum has a substantial amount of shares that were left to her by her father 840000 she is wanting to leave them to my sister and I in her will. She doesn't want to sell them as she said she would have to pay nearly half back in tax. as they were a lot cheaper when he bought them?. What happens with the price of them when left to us thanks?

3 years ago


Hi Tiffany

Will just point out a couple of things in general about your question without going into too specifics of your questions as need dates and a whole lot other things to be able to advise re tax.
1. Anything that was acquired before 20 September 1985 does not attract capital gain tax
2. If they were subject to capital gain tax she does not pay nearly half in tax. Say her capital gain was $300,000. She would get whats called a 50% discount on the capital gain i.e. she pays tax on only $150,000 because of this 50% discount it works out to be less than 25% of the total gain of $300,0000

Hope this helps as a starting point.

Hi Tiffany,
This can be really complex given that the shares were most likely bought prior to CGT rules but would have become assessable when they were left to your mother.
As Suresh said, you won't be paying 50% in tax but you are likely to become liable for some CGT whenever you or your mum decide to sell.
Depending on your mums income and also you and your sister, you may decide upon selling some in your mums name and some in yours and your sisters.
Please go and sit with an experienced tax accountant who can give you specific advice for your situation.
Best regards
0435. 474. 498


Thanks I will do that

Hi Tiffany,
I agree with the other comments, however you should seek some specific advice.
1. I'm assuming your grandfather acquired the shares pre 19 Sept 1985, and died after that date. If that's the facts your mother is deemed to have acquired the shares at market value st the date of death.
2. If he died pre Sept 1985, your mother has a pre CGT asset and you and your sister will be deemed to have acquired them at market price at the date of your mothers death.
In any event when your mother dies you (and your sister) will be deemed to have acquired the shares in 1. Current market value (at date of your mothers death) or 2. At your mothers cost base.
As you can see there are a number of "moving parts".
In any event consideration should be given as to whether it might be preferable for your mother to sell them, realise any gain as she may pay less yax than you and your sister.
Good luck with it.

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