Australia is on the cusp of a $3.5 trillion intergenerational wealth transfer– the largest in the nation’s history. For regional families, this moment isn’t just an opportunity; it’s a fork in the road.
Inheriting assets such as a farm or family business carries more than emotional weight. It brings with it tax complexities, financial impacts, legal obligations, and strategic decisions that can affect livelihoods, relationships and legacies for decades.
For many people facing rising asset values, outdated structures, and growing family complexities, the question isn’t whether you need professional advice, but when and from whom.
More than a legal will: the accounting realities of inheritance
While estate planning is the legal mechanism for determining who gets what, succession and inheritance also entail real financial and accounting implications that are often underestimated.
Capital gains tax considerations.
Even though Australia doesn’t have a formal “inheritance tax”, CGT (capital gains tax) can apply when inherited assets are sold at a later date. If you inherit property and later sell it, you may be liable for CGT on the gain since the original date of purchase (not just since inheritance).
Key issues to consider:
- When was the asset originally purchased? Is it pre- or post- CGT (i.e. acquired before 20th September 1985).
- Was it the deceased’s primary residence or a business asset?
- Do any CGT concessions apply:Main residence, small business, or roll-over relief?
- Will selling assets to “equalise” inheritances among siblings trigger unintended CGT events and liabilities?
At MBC, we often model these scenarios to show families the actual tax impact of their succession choices- BEFORE they make irreversible decisions.
Impact on your Financial Position.
Receiving an inheritance – particularly of a significant asset such as property – can affect your personal or business balance sheet substantially. This may have consequences for:
- Accessing credit or refinancing(suddenly, your equity position has shifted)
- Centrelink entitlements (some inheritance or gifts count towards the asset test)
- Superannuation planning(Future contributions into your fund)
- Income tax (some inherited assets generate income; how will this be taxed and declared?)
A lump sum might feel like a windfall, but the tax and cashflow impacts of “owning more” are rarely straightforward.
The role of structures.
Many family farms and regional businesses are owned or operated through trusts, companies or partnerships. Inheritances or planning for succession must consider:
- Who controls the trust? (hint: it’s not always who “owns” the assets)
- Who owns the shares in the company? How are shares in a company to be transferred?
- Do controlling rights align with the income distributions and ownership expectations?
- Are these structures still fit for purpose based on today’s legislation?
We often advise clients to review their existing structures in light of changing family dynamics, increasing asset values and evolving tax laws.
For example,
- A family trust set up 20+ years ago may no longer offer the best asset protection or tax outcomes.
- A company structure without an explicit shareholder agreement may become a point of dispute when multiple siblings inherit shares.
- Intergenerational wealth held across multiple entities may lack clear documentation, exposing the family to disputes or inefficient estate administration.
Farming Families: Succession is a Financial Strategy, Not Just a Family Decision
For family farms, business continuity is just as important as wealth transfer. That means:
- Keeping the business operational during handover
- Ensuring the next generation understands the financials behind the farm
- Preparing for the transition of liabilities, not just assets.
MBC’s farming clients often deal with:
- Intergenerational debts or long-standing financing arrangements
- Overlapping business structures across generations
- The need to maintain cash flow viability while transitioning land and business assets
We help clients:
- Structure their assets to allow for a staggered succession, e.g. transferring control of operations first, then ownership.
- Use phantom equity models to reward contributions before actual ownership transfer.
- Create tax-effective exit strategies for the older generation, e.g. retirement income through lease back, a SMSF or income splits.
How to Plan Now (Whether you’re Gifting or Receiving)
If you’re planning to pass on assets:
- Review all wills, trust deeds, company constitutions and loan agreements. These need to align- not be contradictory.
- Identify the tax exposure on all assets. CGT, GST, stamp duty, land tax, income tax, and even Division 7A loans in private companies can all come into play.
- Consider equalisation strategies: if one child receives the farm, will the others be fairly compensated? And with what?
- Document everything. Informal promises lead to formal disputes.
If you’re receiving an inheritance:
- Seek tax advice before you accept or sell anything. Once you’ve decided to sell (and sold) you can’t unwind the tax implications.
- Get a clear picture of your new financial position. You may suddenly be liable for land tax, additional insurance and maintenance costs, as well as income tax.
- Check the ownership structure of what you’re inheriting. Is it held in your name? Is it in trust or a company? This affects your rights and responsibilities.
- If you’re taking over a family business, get support- financially, legally and emotionally. It’s a transition, not a transaction.
Good Advice = Greater Legacy
The great wealth transfer represents a once-in-a-lifetime opportunity- but it must be navigated with care. With smart planning, a transfer of wealth can also mean:
- Tax minimisation across generations
- Increased asset protection
- Family harmony and reduced conflict
- Preserved legacy and business continuity
- Growth of wealth- not just protection
At MBC we don’t just look at the numbers, we look at the people, the purpose and the long-term impact. That’s why we approach succession and estate planning holistically. We blend financial strategy, accounting expertise and personal insights so you get the best outcomes.
Your family legacy deserves more than good intentions. It deserves a smart, structured plan.
Whether you’re the current generation considering how to hand over control, or part of the next generation wondering what comes next, getting the right advice early can make all the difference.
From trust structures and CGT concessions to family agreements and succession mentoring- this is the work that protects decades of effort and ensures your wealth benefits the people and causes you care about most.
Need support navigating succession and estate planning?
We’d love to help. At MBC Group Services, we partner with families to structure their wealth, protect their legacy and guide the next generation.
Contact us to start a confidential conversation.
