UK Citizen With Australian Assets: How to Administer the Estate

Re-Sealing a UK Grant in Australia

Australia is a Commonwealth country and recognises UK Grants of Probate through a re-sealing process. However, Australia is a federation — there are eight states and territories, each with its own Supreme Court and probate registry, and the re-sealing must be done in each state or territory where assets are held.

The main states and their probate registries are:

• New South Wales — Supreme Court of NSW, Probate Registry
• Victoria — Supreme Court of Victoria, Probate Office
• Queensland — Supreme Court of Queensland, Registry
• Western Australia — Supreme Court of WA, Probate Registry
• South Australia — Supreme Court of SA, Probate Registry
• Australian Capital Territory and Northern Territory — separate registries

The re-sealing process involves:

1. Obtaining the UK Grant of Probate — see applying for probate
2. Instructing an Australian solicitor in the relevant state
3. Filing the re-sealing application with the appropriate Supreme Court
4. Paying the filing fee (calculated on the value of Australian assets)
5. Receiving the re-sealed grant, which authorises dealing with Australian assets in that state

For a general overview of the re-sealing process, see our guide on re-sealing a Commonwealth grant.

No Australian Inheritance Tax — But Beware Capital Gains Tax

Australia abolished federal inheritance tax in 1979. No Australian state currently levies state-level death duties. This means beneficiaries receive Australian assets tax-free in Australia.

However, Australian Capital Gains Tax (CGT) can apply:

• When the Australian estate or beneficiary sells an inherited asset (such as property or shares), CGT is calculated on the gain from the date the deceased originally acquired it (with some modifications for assets held at death)
• Non-Australian resident beneficiaries (including UK residents) may pay CGT on the sale of Australian real property at 32.5% for non-residents
• A principal residence exemption may apply if the Australian property was the deceased's main home, but there are time limits for selling it after death

Australian CGT paid on the disposal of Australian property is generally creditable against UK CGT on the same gain. An Australian tax adviser should be consulted before any sale of Australian assets by the estate.

Australian Superannuation: A Special Case

Australian superannuation (the compulsory occupational pension system) is one of the most important and complex elements for UK families dealing with an Australian estate. Key points:

• Superannuation does not automatically form part of the deceased's estate — it is held in trust by the super fund and subject to the trustee's discretion (unless a binding death benefit nomination was made)
• A binding death benefit nomination (BDBN) directs the trustee to pay the super to named beneficiaries or the estate; without one, the trustee has discretion and may not follow the will
• Payment to the deceased's estate is possible but may be taxed differently from payment directly to a dependant
• Tax on super death benefits depends on the recipient: a “tax dependant” (spouse, minor children, financial dependant) generally receives the taxable component tax-free; adult children and other non-dependants pay up to 17% on the taxable component
• UK IHT does not apply to Australian superannuation funds held outside the UK unless the UK rules treat the fund as a UK pension for IHT purposes (which is unlikely for a pure Australian super fund held by a UK-domiciled person)

Contact the relevant super fund at the earliest opportunity to notify them of the death and obtain their claims process.

UK IHT and Australian Assets

A UK-domiciled deceased pays UK IHT on their worldwide assets, including Australian property, bank accounts, and shares. Australian assets must be valued at the date of death exchange rate and declared in the UK IHT return.

There is no UK–Australia double taxation treaty specifically covering inheritance taxes. Any Australian tax paid on the estate (such as CGT paid before distribution) may be deductible as a liability of the estate for UK IHT purposes in appropriate circumstances, but this is a complex area. Specialist advice should be taken.

See our UK inheritance tax guide for current IHT rates and thresholds.

Practical Checklist for Executors

• Obtain multiple certified copies of the UK death certificate
• Locate all Australian asset documentation — property deeds, bank statements, share certificates, superannuation fund details
• Apply for UK Grant of Probate — see applying for probate
• Instruct an Australian solicitor in each state where assets are held
• Notify the Australian superannuation fund immediately
• Obtain date-of-death valuations of all Australian assets for UK IHT
• Consider whether Australian CGT will arise on sale of assets and take Australian tax advice
• Include all Australian assets in the UK IHT400 return with the IHT417 foreign assets schedule

For the broader estate administration picture, see our estate administration checklist and complete UK probate guide. For documents needed, see what documents you need for probate.

Get started with Farra for a personalised UK estate administration task list.