In this episode, elder law specialist Alice Mantel reveals the enormous amounts of money transferred through inheritances and gifts. In Australia, unlike many other countries, there is no tax on estates, sometimes known as ‘death duties’.

A Productivity Commission report in 2021 found that more than one hundred billion dollars a year is transferred, mainly through inheritances.

Not surprisingly those on lower incomes receive a significantly larger economic boost from an inheritance, which might make little difference to already wealthy people. As the baby boomer generation passes, their children are usually in their fifties before they benefit financially. But there are ways to improve superannuation incomes by downsizing, rather than leaving the sale of the family home to the beneficiaries of your will.

Alice Mantel advises those who own family homes to carefully consider the downsizer super contribution where it is possible for over 60’s who have owned their homes for more than ten years to transfer significant additional funds to their super accounts. It is possible to transfer up to three hundred thousand dollars per person into super from the proceeds of a house sale.

The downsizer super scheme has the advantage of freeing larger homes for families and boosting super incomes at the same time, therefore benefitting both generations. But there may be impacts on your pension, so it’s vital to do your research.

More information:

ATO: downsizing contributions into superannuation

Choice: downsizer super contributions, what you need to know

Inherited property and capital gains tax

Productivity Commission: Wealth transfers in Australia

Law Society of NSW: wills and estates FAQ