Knowledge Article · Southeast Asia & Pacific
03.2
🇦🇺 Australia
🇬🇧 UK
Australian CGT: why it crystallises the moment you die — not when your heirs sell
The rule that catches almost every Australian with cross-border family: CGT assessed at market value on date of death when beneficiaries are foreign-resident.
⚠ EDUCATIONAL CONTENT ONLY
This article explains general principles only. It does not constitute legal, tax, or financial advice. Laws vary by jurisdiction and change frequently. Last updated May 2026. Always consult a qualified cross-border estate specialist before making decisions.
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Australia has no inheritance tax — but it has capital gains tax on a deemed disposal at death, and the conditions under which this CGT crystallises are not widely understood.
The general rule
CGT is deferred for Australian-resident beneficiaries
When assets pass to an Australian-resident beneficiary, CGT is deferred — the beneficiary inherits at the deceased’s original cost base and pays CGT only when they eventually sell.
The critical exception
CGT crystallises immediately for foreign-resident beneficiaries
When assets pass to a foreign-resident beneficiary, CGT is assessed on the deceased’s final tax return at the date of death, at market value. The full gain since original acquisition crystallises in the year of death — before probate, before any sale, before any foreign process has started. Main residence exemption also unavailable.
Practical example: Sydney property bought for $400k in 1998, worth $2.1m today. Deceased dies leaving it to a French-resident child. CGT on approximately $1.7m of gains assessed on the date-of-death return. Payable before the estate is distributed. The French-resident heir then faces French succession tax under art.750 ter section 2 on top — if they have 6+ years of French residence.
Australia has no inheritance tax treaties with France, Germany, UK, or most countries. Australian CGT and foreign inheritance taxes are different types of taxes on different events — cross-credit between them is not available in most corridors.
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