Bundaberg General Cemetery. Photo: Mike Knott / NewsMail
Bundaberg General Cemetery. Photo: Mike Knott / NewsMail Mike Knott

Australia could raise $5b by putting 'death tax' on rich

HITTING Australia's richest people with a inheritance levy or "death tax" could deliver $5 billion a year to the Federal Government, according to Community Council for Australia boss Tim Costello.

Sydney Morning Herald is reporting the tax would target about 100,000 people who have a net wealth more than $5 million.

About 25% of those are worth more than $10 million.

If just 4% of those households paid 35% in estate duties, it would equate to about $5 billion a year in annual revenue.

This would be less than inheritance taxes applied by the United States, United Kingdom, France, South Korea and Japan.

In the UK, the tax is discounted if part of the inheritance is given to charity.

"Charitable giving in Australia from the rich is low compared to Britain and America," Mr Costello told SMH.

"If [people] donated part of their inheritance to charity that portion could be tax-free."

Mr Costello said he was aware that people may try to avoid the tax by giving away their money before their deaths, but that it was not enough of a reason not to try.