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If you are inheriting money from overseas you will want to know how to transfer it to Australia, but also what tax implications there may be. The good news is that, unless otherwise stated, you don't need to pay tax when receiving inheritance money from abroad. So it's more a case of choosing the right method for you in order to keep your transfer costs as low as possible.
Options for transferring an inheritance to Australia
Bank cheques and bank transfers are the most common ways to inherit money from overseas. But there are newer options such as using an international money provider or a foreign currency account which can reduce your money transfer costs.
International money transfer service
One of the easiest ways to transfer money from overseas is to use an international money transfer service. These specialist companies often provide a stronger exchange rate than your local bank and charge lower fees.
With most, you can set up a free account. Then you will be able to input your transfer details and see what rate and fees you will be charged. As with anything, it is best to compare a few quotes to make sure you are getting the best deal for you.
Foreign currency account
Another option is to open a foreign currency - or borderless account - and transfer the funds there. For example, Wise has a multicurrency account which offers competitive exchange rates and low fees. These types of accounts often allow you to transfer money from one currency to another at a click of a button, as well as spend in your local currency with your card and set up direct debits with supported territories to pay bills and subscriptions.
Bank cheque
Most of the time, when you inherit money from overseas, the estate will give you a bank cheque that you can deposit in your Australian bank account. The cheque should be made out in the foreign currency and will be subject to the exchange rate your bank offers when you deposit the cheque - which is not always the best on the market. It's also worth being aware that a bank cheque will take a long time to clear, so there are faster transfer methods available.
Bank transfer
Alternatively, you could arrange for the estate executor to deposit your inheritance directly into your Australian bank account. This is a quicker process than waiting for a cheque to clear. But the money transfer will still be subject to the bank's fees and exchange rate which typically cost more than using a specialist international money transfer service.
Which international money transfer company should I use?
Our table below lets you compare services you can use to send money abroad. Compare fees, exchange rates and discounts from different money transfer services, and when you have made your choice, click Go to site.
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Is inherited money taxable in Australia?
In Australia, you don't need to pay tax on inheritance. An overseas inheritance is not taxable unless you are advised by the executor that a part of it is. If that is the case, it's advisable to seek professional tax advice.
There are cases where the estate could continue to make an income after the individual's death from the asset sale capital gains or interest accrued on savings accounts. So there may be some capital gains tax liability in these circumstances. Similarly, if you decide to invest your inheritance, you may be required to pay tax on any capital gains under Australia's Capital Gains Tax (CGT) laws.
If you are in any doubt at all, it is best to talk to a professional tax advisor to understand your tax obligations.
Your guide to capital gains tax.
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