Gross Estate in Australia: 2025 Guide for Estate & Tax Planning

When it comes to estate planning in Australia, the term gross estate is more than just legal jargon. It’s the foundation for understanding what happens to your assets after you pass away, and it directly influences how your wealth is taxed and distributed. Whether you’re preparing your own estate or navigating the affairs of a loved one, knowing exactly what’s included in the gross estate—and the latest policy updates for 2025—can make a significant difference in your financial outcomes.

What Is a Gross Estate?

In simple terms, the gross estate is the total value of all assets and interests owned by an individual at the time of their death, before any debts, liabilities, or taxes are deducted. While Australia doesn’t have a formal federal inheritance or estate tax (it was abolished in 1979), the concept of gross estate remains central in probate, capital gains tax (CGT) calculations, and superannuation death benefits.

• Real property: Homes, investment properties, land, and commercial premises

• Financial assets: Bank accounts, shares, managed funds, term deposits

• Personal property: Vehicles, jewellery, artwork, collectibles

• Superannuation: Super balances and certain insurance proceeds, depending on nomination and dependency rules

• Business interests: Shares in private companies, trusts, and partnerships

Some assets—like jointly owned property—may only count partially, depending on the ownership structure. It’s also important to distinguish between assets that pass via your will and those that do not (such as jointly held assets or super with binding nominations).

Gross Estate and Tax Implications in 2025

While the abolition of estate duty means your estate won’t face a federal estate tax, several other taxes can bite into what beneficiaries ultimately receive. In 2025, the Australian Taxation Office (ATO) continues to focus on:

• Capital Gains Tax (CGT): Assets transferred to beneficiaries are generally not subject to CGT immediately, but beneficiaries inherit the cost base. CGT may apply if and when the asset is later sold.

• Superannuation death benefits tax: If your superannuation is paid to a non-dependent (as defined by tax law), the taxable component can be taxed up to 17% (including Medicare levy) in 2025. Payments to dependents are usually tax-free.

• Stamp duty: Although stamp duty is typically not payable on inheritances, transferring real property out of an estate can have state-based implications, especially for non-family members.

Recent policy discussions in 2025 have seen continued debate about introducing targeted inheritance taxes, particularly on large estates, but no new federal measures have been legislated. However, changes in reporting requirements mean that executors must provide more detailed inventories of the gross estate, especially for cross-border assets and cryptocurrency holdings.

Estate Planning Strategies: Protecting Your Gross Estate

With the value of property and investments rising in most Australian capitals, more families are finding themselves with substantial gross estates. Here’s how to ensure your wealth passes on efficiently:

• Update your will: Ensure your will accurately reflects your wishes and accounts for all major assets, including digital assets and superannuation.

• Review super nominations: Use binding death benefit nominations to direct your super to preferred beneficiaries and minimise tax leakage.

• Consider asset ownership structures: Joint tenancy, trusts, and company structures can affect how assets are included in your gross estate and how they are taxed or distributed.

• Document everything: Executors now face stricter ATO scrutiny in 2025. Maintain clear records of all assets, debts, and valuations to simplify probate and reduce disputes.

• Think internationally: If you hold overseas property or investments, be aware that foreign inheritance or estate taxes may apply, and Australian reporting requirements are tighter than ever.

For example, let’s say an individual passes away in 2025 with a Sydney home (valued at $2.3 million), $400,000 in super, $200,000 in shares, and an art collection. Their gross estate totals $2.9 million. While no estate tax is levied, their super payout to a non-dependent child could face a $34,000 tax bill, and any later sale of the home (if it wasn’t the main residence) or shares may trigger CGT for the beneficiaries.

Conclusion: Get Proactive About Your Estate

The gross estate is more than a bureaucratic calculation—it’s the starting point for ensuring your legacy is preserved and your loved ones are looked after. With property prices and asset values at record highs in 2025, taking time to understand what’s included, how taxes work, and the latest compliance changes can help you keep more in the family and out of the taxman’s reach.