Management Letter to George - Inherited Shares in Australian Banks

Running head: MANAGEMENT LETTER TO GEORGE 1
Management Letter to George
Name
Institutional Affiliation

MANAGEMENT LETTER TO GEORGE 2
Management Letter to George
Dear George,
As the sole executioner of AP Spencer Dec’d following the demise of your father, you
have inherited all his investment portfolio that had initially been made in the two leading
Australian Banks. In this case, you are inheriting shares worth $29, 635 purchased by Alexander
P Spencer in the Commonwealth Bank and 2,420 in the National Australian Bank (Howell,
2017). This implies that you will be in the custody of the established investment portfolio
diversified across the outlined Australian banks. As the executor and the beneficially of your
father’s estate, you will be earning off $200,000 yearly in terms of bonuses and the interests
accrued on the inherited shares.
However, there are some few considerations you will have to make regarding your
decision to sell the inherited shares. In this case, two possible legal alternatives can be pursued
when you intend to dispose off the inherited estate shares by selling them. In this regard, you can
either sell them directly or chose to go the other route by first transferring them to your name
before selling them (Gilding & Glezos, 2014). However, in all the undertaken approaches, it is
expected of you to recognize to recognize that you are the legally responsible person liable for
administering the deceased shares (Müller, 2018). In this case, you will have to incur some costs
that would have otherwise been incurred by the original owner of the estate shares in your entire
approach of first transferring the inherited shares to your name before selling them (Long,
Campbell & Kelshaw, 2016). Considering that you do not have the relevant legal background
and information to help in fast-tracking the transfer process, you will have to hire a legal
personal representative (LPR) or administrator to help in ensuring that all the legal and tax
requirements have substantially been met (O'Sullivan, 2016). For instance, as the sole

MANAGEMENT LETTER TO GEORGE 3
executioner of your deceased father’s estate shares, you will be legally responsible for meeting
all the relevant superannuation and tax issues applicable to the inherited estate shares (Lam &
Humphreys, 2017). This implies that it will be your duty to execute tax returns on behalf of your
deceased father, a phenomenon that will subject you to further incurred costs.
Even though the capital gains tax CGT) does not apply when you inherit the estate
shares, it is significant to note that your decision to transfer the inherited estate shares to your
name before selling them will attract a corresponding capital gain tax for the successful
completion of the transfer process. In such a case, the applicable CGT will be determined by the
corresponding cost base of the inherited shares (Feary, 2016). This means that you will be forced
to meet the tax obligations that would have been met by the original owner of the estate shares.
In the entire process of making the necessary transfers, you will also be required record the death
of the original security holder as well as your details as the executioner. As such you will have to
undertake this by meeting all the requirements spelled out in FORM 8 “STANDARD LETTER-
DECEASED HOLDER”.
The decision to transfer the inherited shares to your name before selling them will require
that you made a completed transfer application signed under your name for a successful transfer
process. Arguably, this is a lengthy process involving a lot of paperwork considering that you
will be required to obtain letters or probate of administration from the relevant tax authorities as
well as the applicable subsequent Section 1071B Statement in the entire process of enhancing the
transfer of the inherited shares to your name before selling them (May, 2015). Besides such
complex paperwork, you are also legally required to obtain all the necessary stamp duty on
transfers relating to the territory or the state in which the inherited estate shares were
incorporated. As such, such requirements will further subject you towards incurring additional