Tax on offshore gifts?

A very interesting development is under way at the Supreme Court. As our clients and partners know we have always advocated about the opportunity of setting up an international estate planning with the benefit of not having to pay ITCMD tax on offshore gifts. That is possible because of a loophole in the regulation and with a lot of cases lost by the estates revenue services makint it pretty secure until now.

Sao Paulo estate revenue service lodged an appeal against the judgment of the 6th Public Law Chamber of the São Paulo Court of Justice (TJ-SP) which recognized the right of the taxpayer not be compelled to collect the amount for the gift tax/inheritance tax (ITCMD) on the bequest of a property located in Treviso, Italy, and on the transfer of a sum of money foreign (Euro), both operations carried out in 2005.
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Inheretance tax at 20%?

Inheritance tax rate (ITCMD) at 20% seems to be a reality ever closer. Not only by the government’s present proposal a few months, but now officially a proposal from the states is on the table since the 20th of this month.

The strong increase in revenue on gifting (53.8% higher than the same period 2014 in São Paulo) shows that many families are front running this scenario. On one side will be much more expensive to do estate planning or probate proceedings in Brazil, on the other Brazilian culture to always left the matter for later, often beyond the time required for an orderly planning, might change making families seek more sophisticated solutions to reduce or avoid the higher taxation.
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