STJ Decides: IRRF Does Not Apply to Transfer of Investment Fund Shares in Succession

In an important decision for succession planning, the First Panel of the Superior Court of Justice (STJ) ruled that Withholding Income Tax (IRRF) should not be levied on the transfer of investment fund shares in cases of succession causa mortis, when the heirs choose to keep the shares without redeeming the investment.

This decision represents a significant step forward for those who wish to plan the transfer of financial assets efficiently and at a lower cost. In this post, we'll explain how this measure affects the inheritance process in investment funds and what to consider in estate planning.

The Decision: When IRRF Does Not Apply

The STJ analyzed a case in which two heirs requested the transfer of shares in a fund inherited from their father, keeping the amount declared in the deceased's last income tax return, without making any redemption. Even so, the bank responsible informed them that IRRF would be levied on this transfer.

The STJ decision was in favor of the heirs, understanding that there is no triggering event for the collection of IR when the shares are transferred directly, as the transfer occurs only as a continuation of the deceased's estate, without redemption or immediate profit. IRRF would only be due if the heirs redeemed or liquidated the fund, generating a capital gain.

How Inheritance of Investment Funds Works

For those who own investments and wish to include them in their succession planning, it is essential to understand the tax possibilities and implications. Here is a summary of the most important points:

1. Transfer Without Redemption: Investment fund shares can be transferred directly to heirs, maintaining the value of the deceased's last tax return, without immediate redemption. This means that the heirs can choose to keep the investment and its profitability, without incurring IRRF.

2. Inheritance Tax: Although IRRF is not levied on the simple transfer of ownership, ITCMD (Imposto sobre Transmissão Causa Mortis e Doação) is still levied in most Brazilian states. This tax is specific to inheritance and is levied on the total value of inherited assets.

3. Succession planning: The STJ decision highlights the importance of good estate planning, as it avoids unnecessary costs. By keeping the investment quotas, the heir assumes the deceased's position in the fund, taking advantage of the appreciation of the assets over time and deferring the payment of IR until there is a redemption or sale.

Advantages of the decision for estate planning

Essa decisão judicial é um facilitador para herdeiros e planejadores financeiros. Ela permite que os herdeiros continuem o investimento sem arcar com a carga tributária do IRRF. Para quem investe pensando na transferência de patrimônio, é uma forma de garantir que os ativos financeiros sejam transferidos de forma menos onerosa, promovendo mais liberdade de decisão para os herdeiros.

Planejamento Sucessório e Economia de Tributos

This court decision is a facilitator for heirs and financial planners. It allows the heirs to continue the investment without bearing the IRRF tax burden. For those who invest with the transfer of assets in mind, it is a way of ensuring that financial assets are transferred in a less onerous way, giving heirs more freedom of decision.

Succession planning and tax savings

The transfer of investment fund shares in cases of inheritance, without IRRF, is an achievement for those who wish to facilitate the succession of assets in an efficient manner. With the possibility of inheriting funds without the immediate collection of IRRF, heirs gain more flexibility to continue investing, leaving the capital gain to be taxed only when there is an actual realization, such as redemption.

This decision is an opportunity to rethink succession planning and ensure a lighter, more planned financial transition. For more details on inheritance and financial planning, consult our specialized team!