Compare a proposed family arrangement with the capital-gains passing tests
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the will, the proposed redistribution and the asset list, set out each asset, who takes it under the will, who would take it under the proposal, and whether the only consideration described is a variation or waiver of a claim to an estate asset. Leave the tax conclusion blank. The tool does not write a deed.
- What the lawyer must review
- The lawyer decides whether the passing tests are met and writes any deed. The ATO page says a beneficiary becomes the owner if the asset passes under a will, including a court order varying the will; under intestacy, including a court variation; because it was owned at death and is distributed in specie; or under a deed of arrangement to settle a claim to participate in the estate where the only consideration is the variation or waiver of a claim to one or more estate assets. Generally there is no capital gains tax on that passing, and a later disposal can be a capital gains tax event. The legal personal representative disregards a gain or loss where the deceased owned the asset just before death and it passes to a beneficiary. A deed of arrangement generally must be made before administration is finished. After administration, the person must be able to show that a court would be likely to consider a family-provision application, or an extension of time, at the time of the deed. If the asset passes to a foreign resident, capital gains tax can apply to the deceased at death where the asset was acquired on or after 20 September 1985, the deceased was an Australian resident at death, and the asset is not taxable Australian property in the foreign resident's hands. The gain or loss uses market value at death against the cost base or reduced cost base and is reported in the date-of-death return. The same death-time tax applies if the asset passes to a tax-advantaged entity, being a tax-exempt entity such as a church or charity, or the trustee of a complying super fund, a complying approved deposit fund, or a pooled super trust. The page says a testamentary gift to a deductible gift recipient can be disregarded if the gift meets both conditions it states, and the second condition was not on the page that was read, so it is not stated. Life and remainder interests are left to Taxation Ruling TR 2006/14, which was not opened. Stamp duty was not opened.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | From the will, the proposed redistribution and the asset list, set out each asset, who takes it under the will, who would take it under the proposal, and whether the only consideration described is a variation or waiver of a claim to an estate asset. Leave the tax conclusion blank. The tool does not write a deed. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Record the only consideration. If anything else is given, do not treat the ATO deed test as met.
- Record whether the legal personal representative has finished administration. The after-completion path needs the family-provision likelihood the page describes.
- Separate an asset passing to a foreign resident or a tax-advantaged entity and apply the death-time test instead of the general no-tax passing.
- Do not complete the deductible-gift-recipient test. The second condition was not on the page read. Do not write deed clauses.
Sources
- ATO: How CGT applies to inherited assets · 2026-10-22
These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.