Can I check a recent answer you gave about the CGT impact on inherited shares after July 1, 2027? **My understanding is that a death after July 1, 2027 changes how CGT is calculated before and after death, but it does not create an immediate CGT liability for either the estate or the beneficiary. The beneficiary can still inherit the shares in specie and only pay CGT if and when they eventually sell them. **

However, your answer appeared to say the opposite – that the recent changes rushed through Parliament mean a death after July 1, 2027 creates an immediate CGT liability in the estate before the shares can be passed to the beneficiary. You are the only commentator I have found, whether a real adviser or an AI one, who has taken that view, and I would have expected far more public outcry if this really amounted to a secret death tax. I can only hope I have misunderstood your answer or, heaven forbid, that you are wrong. Perhaps the piece was written before the government walked back its proposal on unrealised capital gains.

I went back to tax expert Julia Hartman of BAN TACS, who confirms that what I wrote is correct under the legislation as it stands. On August 4, 2026, the Government released draft legislation containing proposed corrections, but unfortunately none of them resolves this particular problem.

There are, however, some cryptic remarks in the explanatory memorandum acknowledging problems with rollovers and indicating that they may be dealt with in future amendments. At least that suggests the government is now aware of the issue.

The reason it has received so little media attention is that the legislation is extraordinarily technical, which makes it even more important to keep the issue in the spotlight and put pressure on the government to fix it. It is astonishing that such an important defect was not corrected in this latest round of amendments.

The problem arises because, to preserve the 50 per cent CGT discount on gains accrued up to July 1, 2027, the legislation effectively deems a CGT event to have occurred at that time. The tax is not payable immediately because another provision defers payment until a “realisation event” occurs.

Unfortunately, the definition of a realisation event is vast and includes just about any change of ownership. Death is one of those events because, when you die, ownership of your assets passes to your estate.

Because you were alive on July 1, 2027, the capital gain accrued before that date has effectively been separated from the rollover provisions that would normally allow assets to pass to your estate and beneficiaries without triggering an immediate tax bill. When death subsequently becomes the realisation event, that deferred pre-July 1, 2027 gain becomes taxable.

It is difficult to believe that the detour away from the normal rollover provisions and into this new concept of a realisation event could have been designed without somebody appreciating the consequences for death, divorce and other involuntary transfers.

The good news is that the government now appears to recognise there is a problem. The bad news is that it has not yet fixed it. Given the way this legislation has been handled so far, I would not assume the eventual amendments will automatically restore the position to what it was before.

There are no gifting prohibitions between couples. You can give each other as much as you’d like without penalty.

We need to keep the pressure on and make sure it is fixed properly. Otherwise, before we know it, July 1, 2027 will be upon us and this extraordinary death, divorce and disaster tax will be part of the law.

I turn 67 in April next year and intend to apply for the age pension. I currently have $460,000 in my super accumulation account. My wife will not reach age pension age until September 21, 2028, about 17 months after me. She currently has an account-based pension with a balance of $116,000.

If she were to transfer her account-based pension back into an accumulation account, would I then be able to transfer some of my super into her accumulation account so that my assessable assets fall below the assets test threshold for a single age pension? If this strategy is available, would the transfer be caught by the gifting rules if it were done about eight months before I apply for the age pension? Also, is there a limit on how much I could transfer?

You are on the right track. And the good news is, there are no gifting prohibitions between couples. You can give each other as much as you’d like without penalty.

Once all the superannuation is in your wife’s name (note that the non-concessional contribution cap will limit how much can be contributed to her account from the withdrawal of your super), and in accumulation mode, not pension mode, the asset will not count until she reaches pensionable age. You will be assessed as a couple, and you will receive 50 per cent of the couple’s pension based on your assets and income.

I am 70 and retired, with financial assets of $605,000 in my super pension account and $150,000 in shares. My income is therefore well below the tax threshold. Am I right to understand that from July 2027, any capital gain on my shares will be taxed at 30 per cent, even though my income remains below the threshold? If that is the case, would I be better off invested in an income-producing investment rather than a growth asset?

Your understanding is broadly correct, but the key date is June 30, 2027. If, for example, you had owned the shares for three years before that date and sold them one year later, three-quarters of the gain would be taxed under the old rules and one-quarter under the new rules, which impose a minimum tax rate of 30 per cent. However, if you became entitled to the age pension in the income year the shares are sold, the minimum 30 per cent tax would not apply.

You should discuss your circumstances with your accountant, but it may be simpler to sell the shares before June 30, 2027. That way, only 50 per cent of the capital gain would be taxable under the current rules, and any capital losses could be used to offset the gain. You could then contribute the proceeds to super, where you would be in a much more favourable tax environment.

I am 84 and have a SMSF with $1,080,000. If I withdraw $450,000 from my super and use it to pay off my daughter’s mortgage, will that withdrawal be counted for age pension or aged care purposes?

Aged care expert Rachel Lane says the short answer is yes – for five years.

Under the social security gifting rules, you can give away up to $10,000 in a financial year, with a maximum of $30,000 over five financial years, without affecting your entitlements. Gifts above those limits are treated as “deprived assets”.

Assuming you have not made any previous gifts, $440,000 of the $450,000 would be treated as a deprived asset. It would continue to be counted as one of your assets and deemed to earn income for age pension and aged care purposes for five years from the date of the gift. In effect, it would be treated as though it were still in your SMSF.

Based on the figures you’ve provided, you would be unlikely to qualify for the age pension during that five-year period and would continue to pay the maximum means-tested contribution towards your aged care. There is a possibility you could become eligible for a small part age pension during that period if the relevant thresholds increase sufficiently, but that would depend on your circumstances at the time.

Once the five years have expired, the deprived asset is no longer counted. Depending on your financial circumstances at that time, you may then qualify for a part age pension, and your aged care contributions could also be reduced.

Noel Whittaker is author of Retirement Made Simple and other books on personal finance. Questions to: noel@noelwhittaker.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.