The Brazilian tax reform, introduced by Constitutional Amendment No. 132/2023 and implemented by Supplementary Law No. 227/2026, reorganized the ITCMD — the state tax on inheritances and gifts — on at least four fronts at once: mandatory progressive rates in every state, capped at 8% by Federal Senate Resolution No. 9/1992; a new way of calculating the tax base, now anchored in the market value of assets and of interests in companies; the aggregation of successive gifts between the same donor and the same donee for the purpose of placing them in a rate band; and the closing of the gap that had long shielded from state taxation those transfers involving assets or persons abroad.
Taken together, these changes alter at the same time the cost of inheritance, the cost of lifetime gifts, and the design of wealth structures that had been operating settled — family holding companies in particular.
The technical timetable
The new rates take effect only once the states have enacted their own legislation and observed the anteriority rule, the constitutional principle that defers collection to the following fiscal year and requires at least ninety days between publication of the law and the start of collection. But despite the temporary calm, the landscape taking shape for 2027 is different from today's.
States such as São Paulo, which still charges a flat 4%, are debating bills to adapt their rules. However much uncertainty remains, the direction of travel holds: larger estates will tend to move into higher bands.
How the progressive rates work
It should be stressed that the effect is not confined to inheritance. Lifetime gifts — a common device in family structuring, in contributing capital to holding companies and in organizing corporate quotas — are also caught by the ITCMD and by the mandatory progressive rates the reform introduced.
Which is to say: the fiscal design that historically distinguished the lifetime act from the succession act, in planning terms, loses part of the margin it offered.
A point about how progressivity works is worth making here: it operates in bands. The highest rate in the table does not apply to the entire amount transferred; it reaches only the portion above the previous band's ceiling. In the final sum, the percentage that actually applies to the whole estate — the effective rate — falls below the top rate, the marginal rate.
That does not lessen the significance of the impact, but it rules out simplified calculations projecting an 8% ITCMD across an entire estate.
The new tax base
The change to the tax base is the one with the greatest effect on asset holding companies. The new federal legislation requires the base to reflect the market value of the asset or right at the time of transfer.
For interests in companies that are not publicly traded, the parameters are moving toward three combined references: the company's net assets revalued at current market prices — technically, adjusted net equity — plus the intangible value of the business, its goodwill, and, in some configurations, the projection of future cash generation, that is, discounted cash flow.
This is because book value, anchored in historical acquisition cost, spent decades as the tax's usual reference, detached from the economic reality of the assets. Moving to market value removes that possibility.
In practical terms, holding companies that own real estate acquired decades ago, or whose intangible value is significant, are in a stronger position if they carry out a technical valuation of their assets in advance, rather than leaving it to the tax authorities to do on less favorable parameters.
Aggregating successive gifts
The aggregation of successive gifts between the same donor and the same donee is the third technical element reshaping how planning is designed. Earlier gifts are now added to the new gift to determine which band of the table the tax is calculated in.
A historically common strategy — splitting one larger gift into several smaller ones over time, to take advantage of exemptions or stay in lower bands — loses its effectiveness when used on its own.
State legislation will set the period over which gifts are aggregated, whether annual or multi-year, but the aim of the federal rule is clear: to stop the fragmentation of an estate into small gifts from continuing to serve as a route to lower tax.
The international reach
To these fronts is added the closing of the gap that existed as to the international reach of the ITCMD.
For many years, absent the national supplementary law the Federal Constitution requires for those situations, state assessments on inheritances and gifts involving assets or persons abroad were set aside by the courts, on the basis of the position taken by the Federal Supreme Court (Supremo Tribunal Federal) in a ruling with general binding effect.
The new federal legislation supersedes that position and authorizes collection in those cases, subject to the federal rules determining which state has jurisdiction — a question calling for specific analysis in each structure.
The planning window
Against that background, the interval between publication of the new federal law and the start of collection under adapted state rules opens a planning window that is short but of considerable importance.
The first impulse is to treat it as a mere tax opportunity, but the correct reading is another: at this moment, time is itself a planning asset.
That means wealth structures already under discussion — family holding companies, scheduled transfers, shareholders' agreements with succession clauses — now operate on a timetable in which the date of execution has ceased to be a matter of indifference.
Beyond that, it is worth noting, on the horizon, a proposal before the Federal Senate to raise the ITCMD's nominal ceiling above the current 8%. Without treating it as in force or imminent, it is best regarded as one more element reinforcing the significance of the present window.
Integrated anticipation, not a tax reflex
To close, a caution: the decision to bring forward acts affecting family wealth cannot be driven by the tax picture alone.
Integrating succession objectives, family governance, the marital property regime of the descendants and protection against shareholder disputes is what separates planning that holds up over time from a hurried tax reflex.
It is therefore predictable that decisions taken in 2026 without that integration, purely in response to the expectation of higher taxes, will produce problems that were not on the business owner's original horizon: assessments for sham transactions; loss of control of the company where quotas are transferred too early; exposure of family wealth in a child's divorce, absent a clause excluding the asset from marital property; or dilution of governance in family structures without a well-designed shareholders' agreement.
The window is there. But it is better to look at what is on the other side before jumping in haste.
