Older clients often ask whether they should move their share portfolio into joint names with their spouse now, “to keep it simple”. Before doing so, it is worth understanding the tax cost and the alternatives.
Moving shares into joint names triggers CGT now
Transferring half of a share holding to your spouse is a disposal for capital gains tax (CGT) purposes. Because the transfer is not at arm’s length, the gain is generally worked out using market value, even if no money changes hands. On a portfolio held for decades, the tax bill can be significant.
Leaving shares in your Will usually defers CGT
When shares pass to a beneficiary on death, any capital gain or loss is generally disregarded at that point. This is often described online as tax being “completely exempt”. That is not accurate. In most cases the tax is deferred, not removed:
- Shares bought on or after 20 September 1985: the beneficiary inherits the deceased’s original cost base. When the beneficiary later sells, CGT is calculated on the gain since the original purchase.
- Shares bought before 20 September 1985: the beneficiary’s cost base is the market value at the date of death. Gains made during the deceased’s lifetime are effectively removed.
For many families, keeping shares in the original owner’s name and leaving them by Will is the more tax-efficient path. Your accountant should confirm the numbers for your portfolio.
Drafting tips for gifts of shares
- Do not list account numbers or values in the Will. Holdings change, and an out-of-date description can cause disputes. A gift of “all my shares and securities” is usually clearer.
- Make sure the residue of the estate, everything not specifically gifted, also goes where you intend.
- Appoint a back-up executor in case your first choice cannot act.
An Enduring Power of Attorney is essential, but it has limits
If the owner loses capacity without an Enduring Power of Attorney (EPOA), share accounts can become very difficult to manage. Family may have to apply to VCAT for an administration order. An EPOA appointing a trusted person, often the spouse, avoids that.
It is important to understand what an attorney cannot do. Under the Powers of Attorney Act 2014 (Vic), an attorney must act in the principal’s interests. They generally cannot enter into transactions that benefit themselves, such as transferring the principal’s shares to themselves, unless the EPOA expressly authorises it or VCAT approves. Gifts are limited to modest amounts in line with the principal’s past practice. An attorney also cannot make or change a Will for the principal.
If you want your attorney to have specific powers, such as managing an SMSF or making certain gifts, those must be considered and drafted at the outset.
Plan the documents together
Your Will, superannuation nominations, EPOA and the way your assets are owned should be reviewed as one plan. Changing one in isolation can undo the others. If you are marrying, remember that marriage affects your existing Will. We also recommend appointing a medical treatment decision maker at the same time.
How we can help
We prepare Wills, EPOAs and medical treatment decision maker appointments, and coordinate with your accountant on CGT and superannuation. We act for clients in English, Mandarin and Cantonese.
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Call (03) 9602 3988 or email chuatan@tpg.com.au to book a consultation.
This article is general information only and is not legal, tax or financial advice. The law discussed is Victorian law and Commonwealth superannuation and tax law as at October 2026. Please obtain advice about your own circumstances.
Important: This article is general information only and must not be relied on. It is not legal, tax or financial advice, does not take your circumstances into account, and may not reflect changes in the law after publication. Laws of other countries may also apply. Do not act or refrain from acting on the basis of this article. Reading it or contacting us does not create a lawyer–client relationship. Please book a consultation for advice on your situation.
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