Complementary Law No. 227 of January 13, 2026, published in the Federal Official Gazette of January 14, 2026, Section 1, page 1, created the national general rules for ITCMD, the Brazilian state tax on inheritance and gifts. Until then each state set its own regime with little national reference, and central issues were disputed in court. The same law establishes the Management Committee of the Tax on Goods and Services, known as CGIBS, governs the IBS administrative tax procedure and the distribution of revenue, and amends Law No. 5,172 of 1966, the National Tax Code. The text came from Bill PLP 108/2024, approved by Congress in December 2025 and sanctioned with vetoes recorded in Message 36/2026.
What changes in ITCMD
- Mandatory progressive rates: rates must now be progressive according to the value of each share, legacy or gift, up to the ceiling set by the Federal Senate, currently 8%. States that still apply a flat rate will have to move to brackets.
- Market value as tax base: the market value of the transferred asset or right becomes the express parameter, replacing historical values or cadastral references.
- Quotas and shares of private companies: valuation must follow a technically sound methodology reflecting market value, with a floor of net equity adjusted to market value plus goodwill. This is the point that most affects family holding companies built on book value.
- Successive gifts: gifts between the same parties may be aggregated, as state law provides, for the purpose of applying the progressive brackets.
- Foreign elements: the law fills the gap identified by the Federal Supreme Court and gives states the general rule they needed to reach inheritances and gifts involving assets, donors or deceased persons abroad.
- Trusts: tax is due on the effective transfer of assets to the beneficiary, either on the settlor's death or on an early distribution, not on the mere creation of the trust.
- VGBL and PGBL: these Brazilian private pension and life insurance plans remain outside the scope of ITCMD when transferred to the beneficiary, in line with Supreme Court case law.
ITBI and vetoes
As to ITBI, the municipal tax on real estate transfers, the law amends provisions of the National Tax Code. Among the presidential vetoes is the one that allowed optional early payment of the tax before the property is registered, so the collection design remains as it was.
When this actually hits the wallet
The law is in force, but ITCMD is a state tax: to collect on the new basis, each state must pass its own law and observe the annual and ninety day anteriority rules. In practice, that pushes the financial effects to 2027 in most states, depending on when each legislature approves the change.
In Pernambuco, the State Revenue Department reports that the ICD, as ITCMD is called locally, is governed by State Law No. 13,974/2009 and, since January 1, 2026, by State Complementary Law No. 563/2025, already with progressive brackets from 2% to 8% and an exemption for transfers up to R$ 80,000. Residents here therefore already live with progressive logic, and the local debate tends to center on asset valuation.
What this means in practice
In the reading of Oliveira & Jacobovitz, the axis of estate planning has moved from the rate to the valuation of assets.
- Family holdings are not dead, but their purpose changed. If the structure was built only to transfer quotas at book value, that premise is gone. Holdings remain useful for governance, asset protection and organizing succession, and that is what must be reassessed with updated numbers.
- Valuation reports become central. With a market value base and a defined minimum criterion, the discussion with tax authorities becomes technical. Whoever has a documented methodology argues from a better position than whoever simply declares a figure.
- Foreign assets need review now. Trusts, funds and property abroad now have a legal path to taxation, and structures built under the old rule deserve a fresh opinion.
- Each state will have its own calendar. Since collection depends on state law, decisions about gifting or opening an estate should not rest on guesses about deadlines. Each case requires individual analysis, and this text does not replace specific legal advice or the family accountant.
