06/03/2026
The taxation of inheritances and gifts in Brazil involving foreign elements has always been controversial due to the lack of legal provisions establishing jurisdictional criteria for the collection of the Brazilian Tax on Inheritance and Gifts (“ITCMD”).
Among the new rules introduced for the ITCMD — Constitutional Amendment No. 132/2023 and Complementary Law No. 227/2026 — the tax jurisdiction was defined according to the nature and location of the assets.
If a real estate is transferred, the ITCMD is levied by the State where the property is located, even if the transferor (deceased/donor) resides outside Brazil.
If movable assets are transferred, the imposition of the ITCMD is linked to the domicile of the parties, as follows: (i) if the transferor is domiciled in Brazil, the State of their place of residence prevails; and (ii) if the transferor is domiciled abroad, jurisdiction lies with the State of place of residence of the successor/donee.
Furthermore, when all parties involved are domiciled abroad, jurisdiction will fall upon the State where the assets are located in Brazil.
With respect to gifts and inheritances of assets located abroad, there remains discussion regarding the need for the enactment of specific state laws, which therefore continues to provide planning opportunities in certain situations.
In addition to standardizing the jurisdictional criteria, the new legislation also amended the tax base, establishing that taxation must consider the market value on the date of the taxable event, thereby bringing taxation closer to the economic reality of the assets being transferred.
Additionally, States and the Federal District are now required to adopt progressive ITCMD rates, up to a maximum limit of 8%, so that the more valuable the transferred estate is, the higher the applicable tax rate will be.
Although some of these new rules were already applied by certain states, in the case of São Paulo, for example, there will be a need to adapt the state law, which creates an opportunity for taxpayers.
In light of these recent changes, which establish a new era for the taxation of inheritances and gifts, it becomes essential to review existing wealth and succession planning or, for those who have not yet done so, to initiate it immediately, since the new rules regarding jurisdiction, tax base, and the progressivity of ITCMD rates will substantially increase the tax burden on wealth transfers, likely starting in 2027.
Co-authored by: Marcelo Paolini , João Victor Guedes , Carlo Fantoni Neto e Phillipe da Cruz Silva
