It is not unusual for families to live in different parts of the world, or to want to leave a gift to your favourite charity via your Will. If you plan to leave a gift in your Will to a Charity or a Non- Resident, it is important you receive advice on possible tax implications.

A CGT event may occur if assets which are not classed as ‘Taxable Australian Property’ are transferred to a tax -exempt entity such as someone who lives overseas or a Not-for-Profit association or charity.

Broadly speaking, some assets which are not ‘Taxable Australian Property’ include shares, units in a unit trust or cryptocurrency.

Let’s say a resident Australian parent dies leaving an estate comprising cash of $100,000 and 10,000 shares valued at $250,000 to two children in equal shares; one of the beneficiaries is a non-resident for Australian tax purposes. A capital gain on the shares of $150,000 exists at death.

Because one of the two equal beneficiaries is a non-resident the parent will be deemed to have sold half the shares at the date of death and the estate will be liable for CGT on the capital gain on those shares.