Have you inherited shares or property from a deceased person?
If you have and are planning to sell these assets, you need to know what you cost base is to calculate if you have a taxable gain or loss on the asset.
Determining the cost base of an asset can be challenging. Sometimes the records have been destroyed for the deceased, or the assets where also inherited assets from an earlier deceased estate. You may also inherit the asset jointly with someone else.
There are also different rules for cost base depending on when the deceased purchased the asset. If the asset is purchased before September 1985, your cost base is the market value of the asset at the date of passing of the deceased. If the asset was purchased after September 1985, your cost base is the same as the decease’s cost base.
If your asset is shares held with Listed companies, information you may need is the dates of various different share purchases, dividend reinvestments and share buy backs. If the shares go back a long way, like BHP shares, you may be dealing with pre-September 1985 shares and post-September 1985 shares. BHP also had share purchase plans, dividend reinvestments, demergers and a list of reconstructions.
If your asset is property, the information you may need is the date of renovations or significant capital works to the property. This can be complicated further if the property was the main residence of the deceased.
If your asset is a business asset such as farming land then your cost base and capital gains tax calculation may be complicated by the small business concessions.
To avoid the issues of not having the correct information for cost base of your assets, remember to keep the records of those assets you purchase. If you inherit any assets, ask for the cost base information.
Also remember if you are selling an asset, to talk to your trusted adviser about any tax payable.