Tax planning for deceased estates has become more complex following the release of Tax Determination TD 2026/D1 by the Australian Taxation Office (ATO). This draft guidance focuses on when a property held in a deceased estate qualifies for the Capital Gains Tax (CGT) main residence exemption.

For many Australians, the family home is the most valuable asset in their estate. Accessing the CGT main residence exemption can significantly reduce tax liabilities for beneficiaries or trustees. However, the ATO’s stricter interpretation introduces new risks that could unintentionally deny access to this important concession.

Understanding these changes is essential for effective estate planning and protecting intergenerational wealth.

What Is the CGT Main Residence Exemption for Deceased Estates?

The CGT main residence exemption allows a property to be sold tax-free in certain circumstances after the owner’s death.

When the Exemption Typically Applies

The exemption is generally available if:

• The property was the deceased’s main residence
• The property is sold within two years of the date of death

Alternatively, the exemption may still apply if:

• An individual has the right to occupy the property under the will
• That individual uses the dwelling as their main residence until it is sold

This second pathway has now come under closer scrutiny under TD 2026/D1.

Key Changes in TD 2026/D1: A Stricter ATO Interpretation

The central issue in TD 2026/D1 is how the ATO interprets the phrase:

“Right to occupy the dwelling under the deceased’s will.”

A Literal Interpretation

The ATO has adopted a strict and literal approach, stating that:

• The individual must be explicitly named in the will
• General or discretionary powers granted to trustees may not be sufficient

This means many common estate planning structures could be affected.

Impact on Testamentary Trusts and Trustee Discretion

One of the most significant implications of TD 2026/D1 relates to testamentary trusts.

Trustee Discretion May Not Qualify

Where a will allows a trustee to decide who can live in the property:

• The occupant may not qualify for the exemption
• This is because their right is not directly granted in the will

Testamentary Trust Structures Under Pressure

Even in cases where:

• A testamentary trust deed is attached to the will

The ATO may still consider the right to occupy as being granted outside the will, potentially disqualifying the estate from the full CGT exemption.

This interpretation could lead to unexpected tax outcomes for beneficiaries.

Why This Matters: Potential Loss of Tax-Free Status

The financial implications can be substantial.

If the exemption is denied:

• The estate may be liable for CGT on the property
• This reduces the overall value passed to beneficiaries
• Long-term estate planning outcomes may be compromised

Given that property often represents a large portion of wealth, even partial loss of the exemption can have a major financial impact.

Estate Planning Strategies to Protect CGT Exemption

Although TD 2026/D1 is still in draft form, proactive planning is essential.

1. Quantify Potential Capital Gains

• Assess the unrealised capital gain on the main residence
• Understand the potential tax exposure if the exemption is lost

2. Clearly Define Occupancy Rights in the Will

• If a beneficiary is intended to live in the property
• Ensure they are explicitly named in the will

This is critical under the ATO’s current interpretation.

3. Plan the Timing of Property Sale

• Selling within two years of death may preserve the exemption
• Delays could increase tax risk

4. Review Testamentary Trust Structures

• Testamentary trusts remain valuable for asset protection and tax planning
• However, their interaction with CGT rules must be carefully reviewed

5. Review Existing Wills and Estate Plans

• Existing arrangements may no longer achieve the intended tax outcome
• Professional legal and tax advice is strongly recommended

No Retrospective Relief: Why Early Action Is Critical

Based on current guidance, TD 2026/D1 does not appear to offer retrospective concessions.

This means:

• Existing estate plans could be affected
• Tax consequences may arise unexpectedly

Early review and adjustment of estate planning documents can help mitigate these risks.

The Complexity of CGT and Estate Planning

Estate planning involves a combination of:

• Tax law
• Legal structures
• Personal objectives

The introduction of TD 2026/D1 adds another layer of complexity, particularly for:

• Blended families
• Complex trust arrangements
• High-value property estates

Careful structuring is essential to ensure intended outcomes are achieved.

Conclusion: Review Your Estate Plan Before Rules Tighten

The ATO’s draft determination TD 2026/D1 signals a shift toward a stricter interpretation of CGT rules for deceased estates. While the main residence exemption remains a valuable tax concession, accessing it may now require more precise estate planning.

To protect wealth and avoid unintended tax liabilities:

• Ensure wills are clearly drafted
• Align legal structures with tax requirements
• Seek professional advice where needed

Taking action now can help preserve the full value of your estate for future generations.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

As the Fringe Benefits Tax (FBT) year draws to a close on 31 March, many Australian businesses are reviewing their obligations, particularly when it comes to work vehicles. This is an area under increasing scrutiny by the Australian Taxation Office (ATO), with many employers unintentionally misreporting or failing to report fringe benefits correctly.

Providing employees with a work vehicle may seem straightforward, but when private use is involved, FBT obligations quickly become more complex. Getting it wrong isn’t just an administrative issue, it can lead to significant penalties, compliance risks, and unintended tax consequences for both employers and employees.

Understanding FBT on Work Vehicles

Fringe Benefits Tax is governed by the Fringe Benefits Tax Assessment Act 1986 and applies when employers provide non-cash benefits to employees, including the use of vehicles for private purposes.

When Does FBT Apply?

FBT may apply if:

• An employee is allowed to use a work vehicle for private travel
• The vehicle is garaged at or near the employee’s home
• The employer owns or leases the vehicle

Importantly, the ATO considers a vehicle to be available for private use even if the employee does not actively use it for personal trips garaging it at home is enough to trigger FBT implications.

Electric Vehicle FBT Exemption: What You Need to Know

The introduction of FBT exemptions for electric vehicles (EVs) has created opportunities for tax savings—but only if strict criteria are met.

Eligibility for EV FBT Exemption

Employers may qualify for an exemption where:

• The vehicle is owned or leased by the employer
• It is provided to a current employee
• It is a zero or low emissions vehicle (battery electric, hydrogen fuel cell, or plug-in hybrid)
• It was first held and used on or after 1 July 2022
• Its value is below the luxury car tax threshold for fuel-efficient vehicles ($91,387 for 2025–26)

Important Update: Plug-In Hybrid Vehicles No Longer Exempt

From 1 April 2025, plug-in hybrid electric vehicles (PHEVs) are generally no longer eligible for the FBT exemption.

Limited Transitional Relief

The exemption may still apply if:

• The arrangement was in place before 1 April 2025, and
• There is a financially binding commitment to continue providing the vehicle

Any change or break in that agreement after this date will usually result in the exemption no longer applying.

Common FBT Mistakes Businesses Make with Work Vehicles

The ATO has identified several recurring compliance issues, many of which stem from misunderstandings or poor record-keeping.

Key Risk Areas

Businesses often:

• Fail to lodge FBT returns despite providing vehicles
• Assume dual-cab utes are automatically exempt (they are not)
• Do not maintain valid logbooks or odometer records
• Incorrectly classify private use as business use
• Overlook that home garaging counts as private availability

These errors can significantly increase FBT liabilities and trigger ATO audits.

Record-Keeping: The Key to FBT Compliance

Accurate documentation is critical when it comes to FBT.

What You Need to Maintain

• Valid logbooks showing business vs private use
• Odometer readings
• Clear classification of vehicle type (car benefit vs residual benefit)

If records are incomplete or invalid, the ATO may apply the statutory formula method, which often results in a higher tax bill.

ATO Crackdown: Data Matching and Penalties

The ATO is increasingly using advanced data analytics to identify non-compliance.

What They’re Looking For

• Businesses not lodging FBT returns
• Inconsistent reporting across tax obligations
• Misuse of exemptions

Real Consequences

In one case involving a Melbourne restaurant:

• Failure to lodge returns and maintain records resulted in a liability of $938,000
• This included base tax, a 75% penalty for reckless behaviour, and interest charges

This demonstrates that the ATO is prepared to take strong action where businesses fail to meet their obligations.

How to Stay Compliant and Avoid FBT Issues

Review Vehicle Usage

Ensure you clearly distinguish between business and private use.

Check Eligibility for Exemptions

Particularly for electric vehicles—rules are evolving and must be applied carefully.

Maintain Accurate Records

Up-to-date logbooks and documentation are essential to support your claims.

Lodge FBT Returns on Time

Even if you believe no FBT is payable, lodging may still be required.

Seek Professional Advice

FBT rules can be complex getting advice early can prevent costly mistakes.

Conclusion: Don’t Let FBT Errors Cost Your Business

FBT on work vehicles is an area where small oversights can lead to large financial consequences. With the ATO increasing its focus on compliance, now is the time for businesses to review their reporting, documentation, and assumptions.

By understanding the rules, maintaining proper records, and staying proactive, you can minimise risk, ensure compliance, and avoid unnecessary penalties while also giving your employees confidence that their tax obligations are being handled correctly.

Source: ATO

Ends

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

Gold and silver are often seen as safe haven assets. Many small business owners and first time investors buy bullion or ETFs to hedge against inflation, diversify their portfolio, or protect cash reserves during uncertain times. But one area that regularly causes confusion is Capital Gains Tax (CGT).

Some investors believe physical gold is private and therefore not taxed. Others assume precious metals are treated like shares. The reality is simpler, but it is important to understand the rules before you sell. This guide explains how capital gains tax on gold and silver in Australia works in plain English, so you can make informed decisions and avoid unexpected tax bills.

Do You Pay Capital Gains Tax on Gold and Silver in Australia?

In most cases, yes.

Under Australian tax law, gold and silver are considered CGT assets. This means Capital Gains Tax generally applies when you dispose of the asset and make a profit .Importantly, CGT does not apply when the value increases. It applies when you sell, gift, transfer or otherwise dispose of the asset.

What Types of Gold and Silver Investments Are Subject to CGT?

Most common forms of precious metal investing fall within the CGT rules, including:

• Physical gold bullion bars
• Physical silver bullion bars
• Bullion coins (including legal tender coins)
• Allocated bullion stored in vaults
• Unallocated bullion accounts depending on structure
• Gold and silver exchange traded funds (ETFs)
• Units in precious metals investment funds

If you purchase gold or silver as an investment and later sell it for more than you paid, the profit is generally a capital gain.

When Is Capital Gains Tax Triggered?

CGT is triggered when a disposal occurs. This typically includes:

• Selling bullion to a dealer
• Selling bullion privately
• Exchanging bullion for another asset
• Gifting gold or silver
• Transferring bullion to a trust or company
• Selling or redeeming units in a gold ETF

The gain or loss is reported in the financial year in which the sale occurs.

Is Private Gold Storage Invisible to the ATO?

Some investors assume that storing gold at home keeps it outside the tax system. That is not how CGT works. Capital Gains Tax applies regardless of where the gold is stored. If you make a capital gain, it is assessable income.

The Australian Taxation Office can access data from bullion dealers, financial institutions and other third parties. In addition, bank transfers and lifestyle audits can identify unexplained funds. The bigger risk for investors is poor record keeping. Without evidence of your purchase price, you may struggle to prove your cost base, which can result in paying more tax than necessary.

Are Gold and Silver Coins Treated as Collectables?

Sometimes.

Certain coins may be classified as collectables if their value is driven by rarity or collector demand rather than metal content.

This matters because:

• Capital losses from collectables can only offset gains from other collectables
• Losses cannot be used against shares, property or bullion gains

The ATO looks at your intention and the characteristics of the asset when determining whether it is bullion or a collectable.

Does the Personal Use Asset Exemption Apply?

Personal use assets acquired for $10,000 or less may qualify for a CGT exemption.

However, investment gold and silver rarely qualify.Bullion purchased as a store of value or investment is generally not considered a personal use asset. Jewellery genuinely worn for personal enjoyment may qualify, but investment-grade bullion typically does not.

The 50 Percent CGT Discount Explained

One of the most important tax benefits for individual investors is the 50 percent CGT discount.

To qualify:

• You must be an individual or trust
• You must hold the asset for at least 12 months
• The gain must be capital in nature

Example

• Purchase price: $20,000
• Sale price: $30,000
• Capital gain: $10,000
• Discounted gain: $5,000
• $5,000 is added to your taxable income

Companies are not eligible for the 50 percent discount.

For small business owners holding gold personally or through a discretionary trust, this discount can significantly reduce tax payable.

Investor or Trader: Why It Matters

If you buy and sell gold occasionally as a long term store of value, you are generally treated as an investor.

However, if you:

• Trade frequently
• Operate in a systematic and commercial manner
• Intend to profit from short term price movements

You may be classified as carrying on a business.

If that happens, profits may be treated as ordinary income instead of capital gains. This means:

• No 50 percent CGT discount
• Different reporting rules
• Potential GST implications

The classification depends on behaviour, not what you call yourself.

How Are Gold ETFs Taxed?

Many investors gain exposure through ASX listed gold ETFs rather than physical bullion.

These are generally treated as CGT assets similar to shares. The 50 percent CGT discount may apply if held for more than 12 months.

However, tax outcomes depend on the legal structure of the product. Some ETFs may include:

• Assessable income components
• Foreign income
• Cost base adjustments

Always review annual tax statements carefully.

Record Keeping for Gold and Silver Investments

Good records are essential.

Keep:

• Purchase invoices
• Dealer details and ABN
• Quantity, weight and purity
• Premiums paid over spot
• Sale invoices
• Shipping and insurance costs

Your cost base generally includes:

• Purchase price
• Brokerage or dealer fees
• Transaction costs

Without documentation, it becomes harder to substantiate your cost base, which can increase your taxable capital gain.

Conclusion: Plan Before You Sell

Gold and silver can be powerful portfolio diversifiers for small business owners and investors. They offer tangible exposure to precious metals and can act as a hedge during economic uncertainty.However, they are not outside the tax system.

In Australia, most gold and silver investments are subject to Capital Gains Tax. The amount you pay depends on how long you hold the asset, how frequently you trade, how it is structured and how well you maintain records.

Before selling significant holdings, especially if you are realising a substantial gain, it is wise to review your position carefully. With the right planning, you may be able to reduce your tax liability, apply capital losses strategically or benefit from the 50 percent CGT discount. Understanding the rules before you act can make a meaningful difference to your after tax return.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email – info@camdenprofessionals.com.au  or arrange a time for a meeting so we can discuss your requirements in more detail.

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General Advice Warning

The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs.

Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.