This article was written by Ian Raspin, Managing Director of BNR Partners and Chair of Step Australia, who has been specialising in the taxation of deceased estates since 2000. For more useful articles from BNR Partners, please see

An issue that comes up regularly is how capital gains tax applies to inherited jewellery.

Jewellery comes within the definition of collectable for CGT purposes (that definition also includes things like artwork, coins and antiques).

Like most other assets, an item of jewellery that was acquired by the deceased prior to 20 September 1985 is taken to be acquired by the deceased person’s legal personal representative (and a beneficiary to whom it may pass) for market value. If it was acquired by the deceased on or after 20 September 1985, it is taken to be acquired for the deceased’s cost base. If the acquisition cost is less than $500, any subsequent capital gain or loss is disregarded.

If the jewellery is sold at a loss, the loss can only be offset against a capital gain from another collectable in the same or later year. It cannot be offset against a capital gain from a non-collectable asset (such as a share).

There are special rules if the item of jewellery was part of a set (that is the $500 threshold applies to the set not the individual items in the set).

While this sounds straightforward, the biggest issue we find is determining when these assets were acquired by the deceased and how much they paid for them. This is another area where keeping records can save a lot of time for those you leave behind.

Ian Raspin TEP, FCPA, FCA, CTA
Managing Director BNR Partners / Chair of STEP Australia