Succession on death

Superannuation assets

Superannuation is often one of the largest assets in an estate, and it doesn't pass the way most people assume. Super is held in trust by the fund's trustee, so it is not automatically part of the estate and is not automatically distributed by the will. On death, the trustee pays the benefit to whoever the deceased named in a valid binding nomination. Without a valid binding nomination, the trustee decides who receives the benefit at its own discretion — which can mean delays, extra paperwork and disputes. (See the Beneficiaries tab for how binding, non-binding and reversionary nominations work.)

Tax on super death benefits

Australia has no inheritance tax, but super death benefits are not always tax-free. What matters is whether the recipient is a tax dependant — broadly a spouse or de facto, a child under 18, or someone financially dependent or in an interdependency relationship at the date of death.

*Rates for 2026–27 and include the 2% Medicare levy where paid directly to an individual. The taxable component is broadly the concessional (pre-tax) contributions and their earnings; the tax-free component is never taxed. Paying via the estate can remove the Medicare levy but does not turn an adult child into a tax dependant.

Because most people's super is largely taxable component, an adult child inheriting super directly can lose a meaningful slice to tax. Strategies exist to reduce this (for example, withdrawal-and-recontribution to lift the tax-free component, subject to age and balance limits) — worth advice if it applies to you.

Life insurance

The proceeds of an insurance policy on the deceased's life are generally paid tax-free to the beneficiary. Where life cover is held inside super, however, the payout is added to the super death benefit and follows the super rules above — and insurance proceeds can create an untaxed element (the 32% rate) when paid to a non-dependant, so where the cover is held matters.

Business assets

Unless the deceased had a buy/sell agreement in place, their business interest forms part of the estate and is distributed under the will — or, without a will, under the laws of intestate succession. That can leave surviving family holding a share of a business they may know little about, alongside surviving co-owners who may not want them as a partner.

A buy/sell agreement solves this. It is a binding arrangement between the business owners that, on death (or disability), the deceased's share automatically passes to the surviving owners, and the deceased's estate receives its value in cash. The purchase is funded by an insurance policy on each owner's life — so the money is there immediately without the survivors having to find it. The benefits for everyone:

• the business keeps operating, now wholly owned by the surviving owners;
• the funds to buy the share come from the insurer, not the survivors' pockets;
• the deceased's family receive clean cash for the value of the share, instead of being locked into a business they didn't choose.

General information only, based on current Australian rules, not personal financial or legal advice. Superannuation, tax and business-succession rules have significant consequences that depend on your circumstances — consult a licensed financial adviser and a solicitor before acting.

Estate-planning checklist → Download — Estate planning essentials →

Small business CGT benefit

Division 152 of the Income Tax Assessment Act 1997 contains four small business CGT concessions for eligible small businesses — a sole trader, partnership, company or trust. You can apply as many concessions as you qualify for, in order, until the capital gain is reduced to nil.

Basic conditions

Before any concession applies, you must meet the basic conditions:

• a CGT event happens — typically the sale of the business or a business asset;
• the event would have produced a capital gain but for these concessions;
• you satisfy one of: you are a small business entity (aggregated turnover under $2 million), you meet the maximum net asset value test ($6 million of net assets), or you are a partner in a partnership that is a small business entity and the asset is an interest in a partnership asset; and
• the asset satisfies the active asset test (it is used in carrying on a business).

The four concessions

15-year exemption

A small business can disregard a capital gain entirely if the asset was owned continuously for at least 15 years and the basic conditions are met. Capital losses are not affected, and you don't even need to apply your discounts or losses against the gain. For an individual, you must be retiring or permanently incapacitated. For a company or trust, there must have been a significant individual for a total of at least 15 years, and the person who was the significant individual just before the CGT event must be 55 or older and retiring, or permanently incapacitated. Payments the company or trust makes to CGT concession stakeholders from the exempt amount are not taxable to the company or the recipient.

Retirement exemption

There is a lifetime CGT retirement exemption of up to $500,000 per person for gains on active business assets. It is designed to help business owners fund retirement, since many were never employees receiving compulsory super. You don't have to close or sell the business — it can keep operating. To qualify you must meet the basic conditions, and:

• the amount you choose does not exceed your remaining $500,000 lifetime limit (reduced by any earlier amounts you've exempted); and
• if you are under 55 just before choosing the exemption, you must contribute the exempt amount to a complying super fund or retirement savings account. At 55 or older, you can keep it as cash.

50% active asset reduction

This reduces the capital gain on an active asset by 50%. You only need to meet the basic conditions. If the gain has already been reduced by the general 50% CGT discount, this applies to the already-reduced gain, and can be combined with the retirement exemption and/or the rollover. You can choose not to apply it — sometimes owners skip it to maximise what can go into super under the CGT cap (below). It doesn't apply where the 15-year exemption already covers the gain, since that gain is disregarded anyway.

Rollover

The rollover defers CGT: the amount rolled over is disregarded for now. You must acquire one or more replacement active assets, or make a capital improvement to existing ones, within the replacement period — broadly up to two years. The replacement must be an active asset at the end of that period. The gain you roll over cannot exceed the total of what you paid to acquire the replacement asset, the incidental costs of acquiring it, and any capital improvement expenditure. If you don't acquire a replacement in time, a CGT event crystallises the deferred gain.

Getting the money into super: the CGT cap

The real power of the 15-year and retirement exemptions is that the exempt amounts can be contributed to super without counting towards your non-concessional contributions cap. Instead they count towards a separate lifetime CGT cap of $1,865,000 (2025–26, indexed). This lets business owners move large sale proceeds into the concessionally taxed super environment. You notify the fund on the CGT cap election form at or before the time of contributing, and generally must be under 75 to contribute.

General information only, based on current Australian rules, not personal financial, tax or legal advice. The small business CGT concessions are notoriously complex and the order in which you apply them changes the result — get advice from a registered tax agent and, where super is involved, a licensed adviser before acting.

Download — Business assets and CGT →

Personal assets

Transferring personal assets

Your personal assets — the home, cash, shares, cars, collectibles, and everything else you own — can pass to others in two ways: through your will when you die, or by gifting them while you are alive. Each route has different rules and different consequences, and getting the order wrong can be costly.

Transfer by will

A well-drafted will makes sure the right assets go to the right people at the right time.

The right assets

Your will can itemise assets and name which beneficiary receives each one. But you can only pass on what you actually own or control — you can't give away more rights than you have. That means assets held jointly (which usually pass automatically to the surviving owner), superannuation (governed by your nomination, not your will), and assets held in a trust or company generally sit outside your will. It's a common surprise: some of your most valuable assets may not be yours to leave.

The right people

A valid will sets out exactly who gets what. But your freedom to choose isn't absolute. You have a legal obligation to make adequate provision for those who depend on you — your spouse or de facto partner, your children, and other dependants. If they feel they've been left out or inadequately provided for, they can bring a family provision claim against your estate, and a court can override your will to provide for them. Clear reasoning, and sometimes a solicitor's note explaining your decisions, can help reduce the risk of a successful claim.

The right time

You don't have to hand assets over outright. Where a beneficiary is young, vulnerable, or not yet able to manage money wisely, your will can hold their inheritance in a testamentary trust — releasing it at a set age or over time, or leaving a trustee to manage it on their behalf. Testamentary trusts can also offer tax advantages for income paid to minor beneficiaries.

What makes a will valid?

A valid will can be made by anyone over 18 who is mentally competent (has "testamentary capacity") and intends to dispose of their assets. It must be:

• in writing;
• signed by you (the testator); and
• witnessed by two people who are not beneficiaries (a beneficiary who witnesses the will can lose their gift).

Your executor is the person who winds up your estate — collecting the assets, paying debts and taxes, and distributing what's left to the beneficiaries (and to any testamentary trust you've set up). Choose someone capable and willing; it can be a significant job.

Gifting while you're alive

You can give property away during your lifetime, but "no money changes hands" doesn't mean "no consequences." Two big ones catch people out:

1. Capital gains tax

Gifting an asset can trigger a CGT event. Under the market-value substitution rule, you're treated as having sold the asset for its full market value on the day you give it away — even though you received nothing. So gifting (or selling below market value) an investment property or shares can leave you with a capital gains tax bill on a gain you never actually pocketed. Importantly, cash is not a CGT asset — gifting cash doesn't trigger CGT (though the Centrelink rules below still apply). If you've held the asset over 12 months, the 50% CGT discount may reduce the taxable gain. State transfer (stamp) duty can also apply to the recipient, again assessed on market value.

2. Centrelink gifting limits (the "$10,000 rule")

If you receive, or expect within five years to claim, the Age Pension or another means-tested payment, gifting is restricted by the deprivation rules. You can give away:

• up to $10,000 in a single financial year; and
• up to $30,000 over any rolling five-year period (with no more than $10,000 in any one year).

The limits are the same for a single person and a couple combined. Anything above these amounts is treated as a deprived asset: Centrelink keeps counting it under the assets test and applies deeming to it under the income test for five years from the date of the gift — even though the money is gone. Gifts made in the five years before you claim the pension are also assessed. Selling something to family below market value counts as a gift of the difference, and gifts generally need to be reported to Centrelink within 14 days.

Gifts to a spouse are exempt (a couple's assets are pooled anyway). The same deprivation rules also affect aged-care means testing, so excess gifting can raise aged-care costs later, not just reduce the pension.

General information only, based on current Australian rules (2026), not personal financial, tax or legal advice. Wills, CGT and Centrelink gifting rules interact in ways that depend on your circumstances — and the order in which you do things matters. Speak to a solicitor and a licensed adviser before transferring or gifting assets.

Download — Gifting and deprivation rules →

Business buy and sell agreement

What a buy/sell agreement does

If you co-own a business, a buy/sell agreement (sometimes called a business will or business succession agreement) answers a critical question: what happens to your share if you die or can no longer work? Without one, your share forms part of your estate and passes under your will — which can leave your family holding an interest in a business they can't run, alongside surviving co-owners who never chose them as partners. A buy/sell agreement makes sure the departing owner's interest transfers cleanly to the continuing owners, and the departing owner (or their estate) receives fair cash value in return — regardless of what the will says.

What the agreement sets out

A properly drafted agreement identifies:

• Whose interest is being disposed of, and what type — shares in a company, units in a unit trust, or a partnership interest;
• Who acquires it — the continuing business owners, or in some cases key personnel;
• The trigger events — most commonly death and total and permanent disablement, and sometimes trauma/critical illness, since these are the events insurance can fund;
• How the business is valued — a fixed formula, an agreed figure reviewed each year, or an independent valuation at the time; and
• The buy and sell obligations — who must buy, who must sell, and how and when the money is paid.

The put and call option mechanism

Most agreements work through mutual put and call options. On a trigger event, the continuing owners can exercise a call option to require the estate to sell, and the estate can exercise a put option to require the continuing owners to buy. Structured correctly, the CGT event happens only when an option is exercised after the trigger — not when the agreement is first signed — so entering the agreement doesn't itself crystallise a tax bill.

Funding the agreement

The agreement is only as good as the money behind it. Insurance is the usual funding source, because it delivers a lump sum exactly when it's needed without the survivors having to find cash, sell assets or borrow. The cover should match the value of the interest — ideally reviewed yearly so it keeps pace as the business grows. The policies can be owned in several ways:

The CGT exemption on the insurance proceeds

Where a trigger pays out a life policy, the proceeds are generally exempt from CGT (under s118-300 of the ITAA 1997) provided the gain is made by:

• the original beneficial owner of the policy;
• an entity that acquired the policy for no consideration; or
• the trustee of a complying superannuation fund.

An important warning: this exemption applies cleanly to death benefits. For TPD or trauma payouts the CGT treatment is narrower and depends on who receives the proceeds and how the policy is owned — cross-ownership and company-ownership in particular can create a CGT liability on non-death claims. And separately from the insurance, the transfer of the business interest itself is a CGT event for the departing owner or their estate, so the cover is often set to include an allowance for that tax, plus legal and duty costs.

General information only, based on current Australian rules (2026), not personal financial, tax or legal advice. Buy/sell agreements sit at the intersection of contract law, insurance and CGT, and the right structure depends entirely on your circumstances — design one with your solicitor, accountant and a licensed adviser working together.

Download — Business assets and CGT →

Inter-generational wealth transfer

The great wealth transfer

Australia is in the early stages of the largest transfer of wealth in its history. Over the next two decades, an estimated $3.5 trillion — and by some estimates, factoring in property and superannuation growth, closer to $5.4 trillion — will pass from the Baby Boomer generation to their children and grandchildren. Boomers make up around a quarter of the population but hold over half of the nation's private wealth, much of it locked up in the family home.

The core tension is one you'll recognise: many Boomers are asset rich but income poor — sitting on a home bought decades ago for a fraction of today's value — while their adult children are often income rich but asset poor, earning well but priced out of the housing market. Bridging that gap in a way that works for both generations is the challenge, and it rarely happens by accident.

When the money actually moves

Traditionally, about 90% of Australia's intergenerational wealth passes on death, through inheritance. Because people are living longer, that means most children don't inherit until they are in their 50s — typically well past the point of most need, when they've already raised their own families and bought (or missed out on) a home. Recipients of inheritances are, on average, just over 50; recipients of gifts are much younger, often in their 20s.

That timing mismatch is driving a shift. Demographers note Boomers are increasingly choosing not to wait — passing wealth earlier, in "dribs and drabs", when it makes the most difference: a deposit for a first home, help clearing a mortgage, or funding grandchildren's education. The "Bank of Mum and Dad" has become one of the country's larger sources of home-deposit funding.

The risk: wealth that doesn't last

A large inheritance is not the same as a lasting one. The common observation in estate planning is that wealth is frequently lost by the third generation — the classic "shirtsleeves to shirtsleeves in three generations". Research points to why: it's less about tax or markets and more about capability. When assets are handed to people who haven't developed the financial understanding to manage them, the money erodes. One industry leader described the greatest destroyer of wealth as "capability asymmetry — when assets are passed on before financial understanding or responsibility."

The data backs the concern: surveys suggest many younger Australians feel confident about money but score low on financial literacy, and tend to spend rather than preserve. A windfall spent quickly on a car, a holiday or debt clearance can vanish without building anything durable.

Strategies that work for both generations

The goal is to move wealth in a way that helps the next generation without compromising the retirement the older generation worked for. Some approaches worth discussing with an adviser:

• Give while living, in measured amounts. Early, structured gifts — a deposit, mortgage help, education costs — land when they count. But mind the Centrelink gifting limits ($10,000 a year / $30,000 over five years) and the CGT consequences of gifting assets rather than cash (see the Personal assets & gifting tab).
• Don't compromise your own security. AMP research shows retirees are torn — keen to help but worried about their own longevity and attached to the family home. Any gifting plan has to leave enough to fund a long retirement and possible aged care first.
• Build the next generation's capability. The most durable transfer is financial literacy. Involving children in managing a small part of the family wealth, or funding access to advice for them, protects the capital far more than the capital alone.
• Use structures where appropriate. Testamentary trusts can protect an inheritance from being diluted by divorce, legal claims or poor decisions, divide it among several beneficiaries, and pass assets down multiple generations. Family trusts keep assets held rather than directly transferred — but need clear succession of control (who becomes appointor and trustee) or disputes follow.
• Balance the estate fairly. Gifts to some children but not others create imbalances that breed disputes. Plan the whole picture — will, super nominations and lifetime gifts together — so the outcome is what you intend.
• Mind the super tax trap. Super left to independent adult children is taxed (17%/32% on the taxable component) where it would be tax-free to a spouse. Strategies exist to reduce this — see the Succession on death tab.

Australia has no inheritance tax, estate duty or gift tax — but that doesn't make transfers tax-free. CGT, super death benefits and the structure of the estate all shape how much actually reaches your family. The families who plan ahead, and who match the wealth with the capability to manage it, are the ones whose wealth endures.

General information only, based on current Australian data and rules (2026), not personal financial or legal advice. Intergenerational planning touches tax, Centrelink, super and estate law at once — work with a licensed financial adviser, a registered tax agent and a solicitor to design a plan for your circumstances.

Download — Inter-generational transfer →

Education costs

School fees

Use the calculator above for a worked example with current figures.

University fees

University fees range from $20,000 to $50,000 depending on the course chosen. Fee-help is available to some students. For those who qualify, the government pays the fees up-front and the student repays once they start earning income. The amount repaid depends on how much is earned.

Other costs

Fees makes up just one part of the total cost when paying for education for your child. Other costs you need to consider include:

• Computers
• Uniforms
• Travel
• Excursions
• Extra curricular activities
• Tutoring and other outside school learning
• Boarding fees

Add these costs to tuition fees if you have an idea of how much they will be.

What it costs to educate a child in Australia

Education is one of the largest expenses a family plans for, and the numbers vary enormously by sector, state and school. The figures below are indicative national averages and ranges for 2026 — use them as a planning guide, not a quote. Fees at any individual school or course can sit well outside these bands.

Preschool and childcare

Long day care nationally averages around $140 to $150 a day before subsidy, and more in the major cities — commonly $150 to $210 a day in metropolitan Sydney and Melbourne. The Child Care Subsidy (CCS) reduces this substantially: families earning under about $85,000 receive 90%, tapering down as income rises and cutting out around $535,000. From 5 January 2026, all eligible families receive at least three days (72 hours a fortnight) of subsidised care, regardless of activity. Government-funded kindergarten in the year or two before school is free or low-cost in most states.

Government (public) schools

Public schooling is often assumed to be free, but it isn't cost-free. On top of voluntary contributions, families pay for uniforms, devices, textbooks, excursions, camps and sport. These typically run from a few hundred dollars to several thousand a year, and the total cost across 13 years of a government education is commonly estimated at around $80,000 or more once all the extras are counted.

Catholic schools

Catholic systemic (diocesan) schools are usually the most affordable non-government option, because they receive a large share of government funding. Indicative annual fees:

Sibling discounts are common in the systemic system, which can materially reduce the cost for larger families.

Independent (private) schools

Independent school fees cover a very wide range. National averages sit around $15,500 a year for primary and $27,500 a year for secondary, but elite GPS, APS and CAS schools charge $42,000 to $55,000 a year for Year 12, with boarding adding a further $25,000 to $45,000. Just as important, the headline tuition is only part of the bill — uniforms, devices, camps, music and co-curricular costs commonly add 25% to 60% on top. A family budgeting $30,000 in tuition should realistically plan for $38,000 to $45,000 all-in.

University

Most domestic undergraduates study in a Commonwealth Supported Place (CSP), where the government pays part of the cost and the student pays a student contribution banded by field of study. For 2026 these range from about $4,738 a year (Band 1 — e.g. teaching, nursing, agriculture) to about $16,392 a year (Band 4 — e.g. law, commerce, medicine).

Students can pay upfront or defer the cost with a HECS-HELP loan, repaid through the tax system. From 2025–26, repayments apply only to income above $67,000, on a marginal basis. HELP debt is indexed each 1 June (about 2.8% for 2026). Full fee-paying students instead use FEE-HELP, which has a lifetime limit of about $136,788 (or $170,984 for medicine, dentistry and veterinary science).

Vocational education (VET / TAFE)

VET and TAFE fees are set largely by the states, so they vary — some states offer fee-free courses in priority areas, and all offer government-subsidised training. Approved diploma-level courses can be funded through a VET Student Loan, repaid under the same income-contingent HELP system as HECS. The overall HELP loan limit for 2026 is about $129,883 for most students, which covers all HELP borrowing (HECS-HELP, FEE-HELP and VET Student Loans combined) over a lifetime.

Figures are indicative 2026 national averages and ranges, compiled from government and sector sources; individual schools, courses and states vary. This is general information only, not personal financial advice. Use the education cost calculator above to model your own situation.