Schedule 5 of 6 · Shares and investments

Shares and investments in a deceased estate

Shares that pass from an estate to a beneficiary usually cause no capital gains tax when they pass; the tax question comes later, if the beneficiary sells. Dividends paid after the death are the estate’s income, and shares the executor sells, for example to pay the person’s debts, are taxed in the estate’s own return.

General information, not financial or tax advice. The ATO’s pages on inherited assets are the official reference. A registered tax agent can work through the figures for one estate, and a licensed financial adviser can talk through what to do with an inheritance.

The ATO says capital gains tax changes from the 2026–27 Federal Budget are now law and apply from 1 July 2027: for individuals, trusts and partnerships, the 50% CGT discount is replaced by cost base indexation and a 30% minimum tax rate, for gains that accrue after that date. This page describes the rules on the ATO’s pages as at October 2026; for a sale after 1 July 2027, check the ATO’s page on the reform first.

5.1Three ways a parcel of shares leaves the estate

When capital gains tax arises on shares the person owned, and in whose return
What happens to the shares	Capital gains tax	Reported in
Passed to a beneficiary under the will or the rules for someone without a will	Disregarded when they pass. It may apply later, when the beneficiary sells.	The beneficiary’s own return, in the year they sell.
Sold or transferred by the executor for any other reason, such as paying debts	Applies under the normal rules, even if the buyer is a beneficiary.	The estate’s trust return.
Left to a foreign resident, a charity or a super fund	Can apply at the moment of death, worked out from the market value on that day.	The person’s date of death return.

The foreign resident rule has conditions of its own: the person must have been an Australian resident when they died, the shares bought on or after 20 September 1985, and the shares not taxable Australian property in the beneficiary’s hands. A gift to a deductible gift recipient can have its gain disregarded where the gift would otherwise have been deductible.

5.2Dividends after the death

Dividends paid after the person died belong to the estate, not to them, and are reported in the estate’s trust return when one is needed. An estate may lodge a trust return even when it isn’t required to, which the ATO gives as the way to claim back franking credits on those dividends. Once shares have passed to a beneficiary, the dividends are theirs, taxed as usual in their own return.

5.3The cost base, either side of 1985

Whoever sells inherited shares needs their cost base to work out a gain. The starting figure depends on when the person who died acquired them.

Cost base and the 12-month clock for inherited shares
The person acquired the shares	First element of the beneficiary’s cost base	Ownership counted from
Before 20 September 1985	The market value on the day the person died.	The day the person died.
On or after 20 September 1985	Generally the person’s own cost base on the day they died.	The day the person acquired them.

The ownership date matters for the CGT discount, which lets an Australian resident individual halve a capital gain on an asset held for at least 12 months. Costs the executor would have added to the cost base had they sold the shares can be added by the beneficiary too, from the date the executor incurred them. Where the person died before 21 September 1999 there is an option to index the cost base instead of taking the discount, though the ATO says the discount usually gives the better result.

Worked example, with made-up figures

Shares bought after 1985. A person bought shares in a listed company in 2012, with a cost base of $9,000. They die in 2025 and the shares pass under the will to a beneficiary, so the executor disregards any gain. The beneficiary sells in March 2027 for $15,400.

Cost base, carried over from 2012: $9,000.
Capital gain: $15,400 − $9,000 = $6,400.
Held since 2012, so well over 12 months; an Australian resident with no capital losses to subtract first halves it: $3,200 in their return.

The same shares bought in 1983. The cost base starts again at the market value on the day of death, say $12,000. The gain on a $15,400 sale is $3,400. Ownership counts from the death, so if the sale is more than 12 months after it, the discount brings that to $1,700.

5.4Records to ask the executor for

The ATO lists what a beneficiary should keep for the day they sell:

the date the person acquired each holding;
what each holding cost them, or its value;
costs relating to the shares paid by the executor and by you;
for anything acquired before 20 September 1985, a valuation at the date of death: a copy of the executor’s valuation report if there is one, or your own valuation if not.

5.5Losses don’t travel

Capital losses the person hadn’t used by the time they died can’t be passed to the estate or to a beneficiary, so they can’t reduce a gain on the shares later. Any use for them has to be found in the date of death return; after that they lapse.

5.6Money the person lost track of

ASIC holds money that banks, insurers and companies have been unable to return to its owners after seven years. As ASIC describes it as at October 2026, unclaimed amounts over $500 from old bank accounts sit with ASIC, while smaller ones are claimed from the bank, and state and territory governments may hold other unclaimed money, including share dividends and estate proceeds. Searching costs nothing, by name, through Moneysmart’s unclaimed money search, and there is no deadline to claim.

5.7When the estate is mostly shares and cash

An estate made up only of listed shares and similar widely held interests, super death benefits, Australian real property, cash and personal belongings is one of the simpler kinds the ATO names when it explains how an executor can finalise without waiting out the period for amending the person’s tax. The conditions are set out in when an estate can be finalised.