Understand the Changes to ITCMD with PLP 108/2024 and the Importance of Estate Planningpiva

In the context of Brazil's tax reform, PLP 108/2024 proposes significant changes to the Tax on the Transfer of Goods or Rights (ITCMD). The reform, as well as the bill, aims to standardize the tax legislation of the states, making a progressive rate mandatory throughout the country, which is expected to provide greater clarity and predictability for both taxpayers and the tax administration. However, despite these efforts, the changes will affect the future lives of many families and business owners, and so, in this period of transition, we must plan, create strategies together with professionals in the field, think through scenarios together, so that we don't suffer from unexpected changes.

Main changes to the ITCMD

Progressive rates Once PLP 108/2024 is implemented, the ITCMD will adopt progressive rates, similar to income tax and the IPTU. This means that, instead of a fixed rate, the tax will be calculated based on bands of value, increasing according to the amount of the inheritance or donation. This measure aims to promote a fairer distribution of the tax burden, so that those who receive larger amounts contribute proportionally more.
Expansion of the Calculation Base Another important change is the expansion of the ITCMD calculation base. For transfers involving quotas or shareholdings, the calculation basis will be the market value of these assets or rights. In the case of shares listed on the stock exchange, the basis will be the closing price on the day before the taxable event. For other cases, an appropriate methodology should reflect, at the very least, net equity adjusted for market value.
Regulation of trusts PLP 108/2024 also addresses the issue of trusts and similar structures. Assets and rights in a trust will be considered to belong to the settlor until their death. The transfer of these assets to the beneficiaries will be treated as causa mortis (inheritance) or donation, depending on the moment of transfer, thus attracting ITCMD taxation.
Place of collection An innovation brought in by PLP 108 is the change in the place of collection of ITCMD in the event of causa mortis. The tax will be payable to the state of domicile of the deceased, and no longer to the state where the inventory or probate of the assets takes place.

The importance of estate and succession planning

In view of these changes, it is crucial to seek specialized advice for effective estate and succession planning that takes these scenarios into account beforehand.

A specialized lawyer can help you fully understand the impact of the new rules and properly plan the management and transfer of your assets.

This advance planning can avoid unpleasant surprises and ensure that asset transfer processes take place as efficiently and cheaply as possible.

It is important to note that the bill is still subject to discussions and amendments in Congress. Therefore, following the progress of the PLP and being prepared for the changes is essential.

Get ready for the changes in ITCMD legislation! Consult a lawyer specializing in estate management and succession planning today. Ensure efficient management of your assets and avoid future surprises.