A parent or grandparent has passed away in Kuala Lumpur, Shanghai, Hong Kong or Singapore, and you live in Australia. After the grief comes a practical question: when the estate is finally distributed, what happens when that money arrives here? Will the ATO tax it, will the bank ask questions, and how do you actually get the funds out of the other country?
These are some of the most common questions our clients ask. The short answer is reassuring: Australia has no inheritance tax. The longer answer is that the way the money reaches you, what it earns along the way and how it is documented all matter.
Is there inheritance tax in Australia on money from overseas?
No. Australia abolished its estate and death duties decades ago. Receiving an inheritance, whether from an estate in Australia or overseas, is generally not treated as income in your hands. A distribution of the capital of a foreign deceased estate, such as a share of the proceeds after your father’s flat in Penang is sold, is usually not something you include in your tax return simply because you received it.
The country where the deceased lived may have its own rules. Some places in Asia have no estate duty at all, while others tax particular assets or transfers. Those taxes are dealt with under that country’s law, usually by the executor before distribution.
When part of the inheritance can be taxed in Australia
Australian residents are taxed on their worldwide income. That means some amounts connected with an overseas inheritance can still be taxable here.
Income earned after you become entitled
If inherited assets earn rent, interest or dividends, that income can be assessable to you once you are presently entitled to it, or to the executor in some circumstances. Estates in Asia can take years to finalise, so income can build up. Ask the executor for a breakdown between original capital and income earned after death.
Distributions from foreign trusts
Many wealthy Asian families hold assets through trusts or similar structures rather than in personal names. If you receive money or property from a foreign trust, Australian tax law (section 99B of the 1936 Assessment Act, in general terms) can include the amount in your assessable income. Amounts that represent the trust’s original capital (corpus) may be excluded, but the rules are technical, and an interest charge can also apply to distributions of accumulated income. The ATO expects you to keep evidence of where the money came from. If an overseas estate pays you through a family trust, holding company or foundation, get tax advice before the funds are transferred.
Assets you keep and later sell
If you inherit an overseas property or shares and keep them, capital gains tax may apply when you later sell. The rules on cost base for inherited assets are specific, and the CGT changes legislated in 2026 apply to gains accruing after 1 July 2027. Record the market value of each asset at the date of death.
Exchange rate gains
An inheritance usually arrives in ringgit, renminbi, Hong Kong or Singapore dollars. If you hold the money in a foreign currency account and convert it to Australian dollars later, a foreign exchange gain or loss can arise for tax purposes when the rate has moved. The same can happen if you keep a foreign currency deposit overseas. These amounts are often small compared with the inheritance but can be significant for large sums held for a long time. Your accountant will need the dates and rates.
Bank checks and AUSTRAC reporting
Australian banks and remittance providers report international transfers to AUSTRAC, the Australian government’s financial intelligence agency, as part of their normal obligations. This is routine and does not mean you have done anything wrong. You do not lodge a separate declaration for a bank transfer.
Your bank may still ask where a large deposit came from. Have the following ready:
- the death certificate and, if needed, a certified translation;
- the overseas grant of probate or letters of administration, or the local equivalent;
- the Will or a document showing your entitlement;
- a letter or statement from the executor or overseas lawyer showing the amount paid to you.
If anyone carries cash or bearer instruments into Australia, amounts of AUD 10,000 or more (or the foreign currency equivalent) must be declared at the border. Splitting amounts to avoid reporting is an offence.
Moving money from China, Malaysia, Hong Kong and Singapore
Mainland China
China has foreign exchange controls. Individuals have an annual quota for buying foreign currency, commonly USD 50,000 equivalent per person (as at October 2026), and that quota is not intended for large transfers such as inheritances. Banks can usually process an inheritance remittance beyond the quota if you produce supporting documents, such as notarised proof of inheritance, death certificates and evidence of the relationship. Requirements vary between banks and branches and have tightened in recent years. Do not use informal arrangements or split transfers between family members; they can breach Chinese rules and create problems with Australian banks.
Malaysia
Malaysian banks apply Bank Negara Malaysia’s foreign exchange policy. Transfers of inheritance proceeds overseas are generally possible, but the bank will want the grant (or a distribution order for smaller estates), the executor’s authority and identity documents.
Hong Kong and Singapore
Neither has exchange controls of the mainland kind, so funds can usually be transferred once the estate is administered. Banks will still carry out their own checks and need the grant of probate or letters of administration.
Practical checklist
- Ask the executor whether the payment is estate capital, income earned after death, or a distribution from a trust or company.
- Get a written statement of what you are receiving and why.
- Collect the death certificate, grant and Will, with certified translations.
- Record the market value of any assets you keep, at the date of death.
- Open a foreign currency account if you want to choose when to convert, and keep the conversion records.
- Tell your bank before a large transfer arrives.
- Talk to your accountant before the end of the financial year in which you receive the funds.
- Keep everything for at least five years after you lodge the relevant tax return, and longer for assets you still hold.
Frequently asked questions
Do I pay tax on an inheritance from overseas in Australia?
Generally no. Australia has no inheritance tax, and a distribution of the capital of a foreign deceased estate is usually not income. Income earned by the inherited assets, distributions from foreign trusts, foreign exchange gains and later capital gains can be taxable, so it is worth checking the source of each amount.
Do I need to declare an inheritance from overseas to the ATO?
You do not declare the inheritance itself as income. You do declare any taxable parts, such as rent or interest earned after you became entitled, or amounts caught by the foreign trust rules. Keep the documents in case the ATO asks.
Will my bank report a large inheritance transfer?
Banks report international transfers to AUSTRAC as a matter of course. This is not an accusation. Having the probate and executor documents ready usually avoids delays when the bank asks about the source of funds.
How can I transfer an inheritance from China to Australia?
Usually through a bank in China, with documents proving the death, your relationship and your entitlement, because the annual personal quota is not designed for inheritances. Requirements vary, so speak to the bank and a Chinese lawyer before starting.
How Chua Tan Associates can help
We assist Australians who inherit from family in mainland China, Hong Kong, Taiwan, Singapore, Malaysia and elsewhere in Asia. We can explain the overseas documents, help prepare certified translations and notarised proofs for use abroad through our notary public, work with local lawyers to obtain the overseas grant, and coordinate with your accountant on the Australian tax position. We advise in English, Mandarin and Cantonese, so the whole family can follow what is happening.
Related reading
Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.
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