Money advice: Will inheriting my mum’s CBA shares trigger a big capital gains tax?

Opinion

Paul BensonMoney contributor

October 18, 2026 — 5:00am

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If I inherit shares from my mother after July 1, 2027, will I have to pay capital gains tax when I inherit them, or only when I eventually sell them? My elderly mother owns shares that she bought about 20 years ago, and which now have substantial unrealised capital gains.

I have heard conflicting information about how the CGT rules will apply after July 1. Will her death and my inheritance of the shares trigger a CGT liability, or does the tax only become payable when I later sell the shares?

The point at which you inherit shares will not trigger a capital gains tax liability.

Thanks for your question. We are seeing a lot of these situations, particularly related to Commonwealth Bank shares.

The point at which you inherit these shares will not trigger a capital gains tax liability. Capital gains tax will be payable when (if) you sell them. You do, however, inherit the cost base, meaning the purchase amount that your mother bought these shares for. You effectively inherit the embedded capital gain.

The new rules that come into effect in July next year do not alter this position. They will affect tax payable on the gains that accrue from 1 July onwards, including the application of the 30 per cent minimum tax. However, they have no impact on the gains until that point.

It would be possible therefore for you to inherit these shares, enjoy the dividends, and never sell them, perhaps passing them on to your own children. In this circumstance, capital gains tax will never be triggered.

Alternatively, if you are retired and living off tax-free income from super, it may be possible to sell small amounts each year and keep under the tax-free threshold.

Good record keeping is a must. Make sure you keep your mother’s original purchase records.

My wife and I are both retired and live off UK sourced pensions and annuities. I am 85 years old and my wife is 78. We recently downsized to a smaller house. With cash from the sale of the house, I set up an investment account for my wife to provide in the event I die before her and her income from my annuities would be much reduced. However, the performance of the investment over the past financial year has resulted in a large tax bill for my wife and for me through me losing my usual low-income allowances. Would our needs be better served by moving the investment account into superannuation?

Thanks for your question. Unfortunately, the opportunity for you to use the superannuation system is no longer there. Contributions can only be made up to the age 75. The one exception is downsizer contributions. However, you need to have made these within 90 days of the downsize occurring.

It would be good to understand why there was such significant tax incurred last financial year on your investments. Sometimes investments produce unusually large occasional gains, often related to foreign exchange hedging, that are not persistent. Were that the case here, perhaps this is not an ongoing problem.

You could use investment bonds instead of your current ownership structure, so that you and your wife have no personal tax liability. However, appreciate that tax is paid within the bond instead, so there’s no free lunch here. Alternatively, you could weight your investment portfolio to Australian shares that produce franking credits, such that these credits offset your tax liability.

There is a positive here. Your investments must have performed well. Losing investments don’t trigger any tax liability at all.

Paul Benson is a certified financial planner at Guidance Financial Services. He hosts the Financial Autonomy podcast. Questions to: paul@financialautonomy.com.au.

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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