Australia abolished death duties in 1979. There's no federal inheritance tax, no state-level estate tax, and no gift tax in the way some other countries have. If your parent leaves you $500,000 in cash, that cash arrives without tax.

The catch is that inheritance rarely arrives as plain cash. It arrives as super, shares, property, and a family home, and each of those categories has its own tax treatment. The Australian Taxation Office handles it as a transfer of ownership rather than an event that triggers a tax bill for you directly, with a few important exceptions covered below.

The general principle is this: the value of the asset when your parent passes becomes your concern going forward. You're not taxed on receiving it. You may be taxed on what you do with it afterwards.

The estate needs probate before any assets can be distributed, which in Queensland typically takes six to twelve weeks through the Supreme Court. Other states are similar. Until probate comes through, nothing's officially yours, and any asset movement inside that window creates administrative complications for the executor.

What to do in the first sixty days:

What to do in the first sixty days:

Spending too much in the first year is the most common. The ATO and behavioural research both show that windfall money tends to get consumed faster than earned money. Cars, holidays, renovations that don't pay back. Setting a rule of "no big commitments for twelve months" protects against most of it.

Not documenting gifts to family is another. If you share part of an inheritance with siblings, children, or extended family without documentation, it can create Centrelink deprivation issues and family tension down the line. A simple letter of gift (or loan, if it's meant to be repaid) handles it.

Selling inherited shares without working out the cost base is the third. The ATO accepts the parent's original cost base if documented, but absence of records means the ATO can default to zero, which is expensive. Dig for statements, check share registries, do the work before the sale.

The fourth is ignoring the super piece. Some beneficiaries assume the super just flows to the estate and gets divided like any other asset. It usually flows via a binding nomination directly to the nominated recipient, which can bypass the will entirely. Understanding this before the event is more valuable than reacting to it afterwards.

Where advice earns its keep

Talk to an accountant and a financial adviser before the lump sum lands in your account. The choice you make about super contributions, property decisions, and tax timing has a much bigger long-term effect than the headline dollar amount.

Super death benefits are the most common source of unexpected tax for Australian families. The rules aren't intuitive, and advisers sometimes see clients who've paid tax they could have structured around.

The tax treatment depends on two things. First, who you are relative to the deceased (a dependant or a non-dependant under tax law). Second, the components of the super balance (taxed or untaxed).

The dependency definition is strict. For tax purposes, an adult child is usually a non-dependant even if there were informal financial arrangements. If a parent had $400,000 in super (all taxable component) and leaves it to two adult children, roughly $60,000 goes to the ATO in tax before either child sees their share.

Where advice earns its keep

There are structuring options if this is being planned in advance. Directing super to a financial-dependent spouse first, then into an estate-planning framework, can preserve more of the balance. A binding death benefit nomination is the tool that controls this, and reviewing it every few years matters. These conversations are much better had while the parent is alive and well.

The family home has a special status in the tax system, and the rules carry through to an inheritance.

If your parent's home was their main residence for the entire period they owned it, the main residence exemption generally applies to you too, provided you sell the home within two years of the date of their death. Inside that two-year window, there's no capital gains tax on any increase in value.

If the two-year window is missed, or if the home was rented out at any stage, the rules get more complex. The market value at the date of death becomes the cost base for the portion that wasn't their main residence, and any increase from there to the eventual sale may be taxable. There are exceptions to the two-year rule if there's genuine difficulty selling (disputed ownership, ongoing probate, vulnerable occupants), and the ATO has a discretionary extension process.

Pre-1985 homes are different again. The capital gains tax system didn't exist before 20 September 1985, so homes purchased before that date are generally pre-CGT assets. When inherited, the cost base is reset to the market value at the date of death.

Shares, managed funds, and investment property come with their original cost base attached. If your parent bought CBA shares at $30 in 1995 and they're worth $140 when you inherit them, your cost base is $30 (plus the 50% capital gains discount if you hold for twelve months). When you sell, the gain is yours to declare.

This means an inherited share portfolio has a built-in tax liability that only appears when you sell. Some families hold the shares long-term to avoid triggering it, which is fine if the underlying investments are sound. Some sell and absorb the tax to redeploy the capital into their own strategy, which is also fine if the timing is right. The wrong move is selling without knowing the cost base, because you'll either overpay tax or end up in correspondence with the ATO later.

Investment property follows similar logic. The original purchase price, any capital improvements, and the date of acquisition all flow through to you. If the property was sometimes a rental and sometimes a main residence, the calculation gets technical and an accountant is worth the fee.

Where advice earns its keep

The practical takeaway: if you're inheriting a home, get the valuation done on the date-of-death value before anything else. That's the number that sets your tax position, and it's much harder to establish in hindsight.

For a lot of Australians inheriting $100,000 to $500,000 in their fifties or sixties, the right home for a meaningful chunk is their own super. It's tax-effective, grows in a protected wrapper, and can be converted to tax-free income in retirement.

The contribution levers:

• Non-concessional contributions are capped at $120,000 a year (2025-26 rate), with a three-year bring-forward up to $360,000 if under 75 and under the total super balance threshold.
• Concessional contributions are capped at $30,000 a year, tax-deductible against your income. Catch-up contributions are available for anyone with a super balance under $500,000 who hasn't used prior years' caps.
• Downsizer contributions. If you're over 55 and you're selling a home you've owned for more than ten years, you can put up to $300,000 each into super outside the normal caps. Some inherited-home sales qualify, but the rules around whether an inherited home can anchor a downsizer contribution are narrow and require careful reading.

Where advice earns its keep

The tax-effectiveness of super makes it the default destination for a chunk of most inheritances. The exception is when an inheritance arrives close enough to retirement that the preservation rules restrict access. That's a timing conversation worth having with an adviser before acting.

If you're already on the Age Pension when an inheritance arrives, your asset and income position changes. Services Australia has to be notified within 14 days. Your pension rate will be recalculated based on the new position.

The biggest impact comes from assets that sit outside super. Cash, shares, and investment properties count toward the assets test. The assets test for a single home-owning pensioner starts tapering at around $321,500 and cuts out entirely at around $722,000 (from 20 March 2026). A $200,000 inheritance can push someone off the part-pension and onto self-funded status overnight.

The worst outcome is receiving an inheritance and letting the pension reduction eat most of its long-term value because the timing wasn't thought through.

The highest-value financial advice engagement around an inheritance is usually in the first three to six months after probate. That's when the structure of what you do with the money gets locked in. After that, the flexibility narrows.

A one-off engagement typically covers the tax-efficient structure (super vs outside super, timing of asset sales, use of CGT discounts), the Age Pension implications if relevant, estate planning updates on your end (because your will probably needs a refresh too), and the longer-term question of whether the inheritance changes your retirement date.

Because we work with a lot of families across the retirement-to-aged-care-to-inheritance arc, we're often already across the family's full position when a parent passes. The conversation doesn't start from zero. The fee for this kind of engagement is typically $3,300 to $6,600 depending on complexity, and the tax savings alone usually cover it several times over.

Where advice earns its keep

Two levers help. If you're over 55 and eligible, putting part of the inheritance into super (which isn't assessed for the pension until you start drawing from it, and then only as income) preserves pension entitlement longer. Structured spending (paying down a mortgage, funding home improvements that don't add to assessable assets, prepaying funeral bonds up to the legal threshold) can also smooth the transition.