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Inheritance tax in Australia 2026
Australia abolished death duties decades ago: there is 0% inheritance tax and 0% gift tax, federally and in every state.
The real rule is deferral: heirs inherit assets together with the deceased's cost base and holding period, so capital gains tax waits until the heir eventually sells.
One watch-point sits inside superannuation — fund payouts to beneficiaries who don't qualify as dependants can carry tax.
At a glance
- top rate
- 0% — no inheritance or gift tax
- entry band
- 0% on gifts of any size
- tax year basis
- Not applicable — no tax event at death
- filing deadline
- None for the inheritance itself
- residency basis
- Applies to residents and non-residents alike
- regime flag
- Capital gains history transfers to the heir
Rates
Death and gifts (2025/26)
| Rate | Base | Applies to |
|---|---|---|
| 0% | — | Inheritances of any size, from anyone, to anyone |
| 0% | — | Lifetime gifts (they can affect means-tested pensions, not tax) |
| Deferred capital gains tax | Heir's later sale | Inherited assets carry the deceased's cost base; pre-1985 assets rebase to death-date value |
| Possible tax | Super death benefits | Payouts to non-dependant beneficiaries (e.g. adult children) can be taxed — rate not covered here, take advice |
Thresholds & allowances
- Main residenceHeirs generally keep the exemption
Selling the family home within 2 years of death usually stays tax-free
Residency
Residency trigger
No Australian jurisdiction taxes the transfer itself; what matters later is the heir's own capital gains position when assets are sold.
Non-resident treatment
Foreign heirs inherit Australian assets free of transfer tax too, but Australian real property stays in the capital gains net whoever holds it — and passing non-property assets to a non-resident heir can itself trigger a deemed capital gains event for the estate.
Notes
- Estate planning here is really capital gains planning: which asset goes to which heir decides whose marginal rate eventually applies.
- Gifting appreciated assets during life is a disposal at market value — the giver can owe capital gains tax even though no money changed hands.
- Superannuation sits outside the will unless directed to the estate; binding death-benefit nominations control who receives it.
- With 0% gift tax, the only practical limits on giving are social-security means-testing rules for pensioners.
FAQ
Does Australia have inheritance tax?
No — 0% at both federal and state level, with no gift tax either. Capital gains tax is deferred: heirs take over the asset's cost base and pay only when they sell.
Is anything taxed when an Australian estate passes?
Two edges: superannuation paid to non-dependant beneficiaries can be taxed, and leaving non-property assets to a foreign heir can trigger a deemed capital gains disposal in the estate — 0% applies to the inheritance itself.
Figures: tax year 2025/26 (July–June basis), compiled from public sources. Not tax advice.