FAQ – ITCMD, inheritance, and donations involving assets abroad (global accounts, investments outside Brazil)

In recent years, there has been a significant increase in the number of Brazilians investing abroad, whether through global accounts offered by domestic banks, foreign brokerage firms, offshore companies, and trusts, or through real estate investments.

In this scenario, inheritances, donations, and estate planning become essential and require close monitoring of legislative changes, the most recent decisions of the Federal Supreme Court and the Courts of Justice, and coordination between estate planning, taxation, and investments.

This FAQ was prepared by the law firm Piva Advogados precisely to answer, in accessible language, the most frequently asked questions from clients who

have assets or investments outside Brazil (international accounts, stocks, funds, real estate, offshore structures); or who have received, or intend to receive, inheritances and donations with assets abroad.

Our goal is to translate current case law into practical answers: when ITCMD is payable, when it is unconstitutional, and what are the possible avenues for defense and planning.

1. What is ITCMD?

ITCMD is the Inheritance and Gift Tax (Tax on Transfers by Death and Donations). It generally applies when:

• Someone passes away and leaves assets to heirs (inheritance);

• Someone gifts assets or rights (lifetime donation).

Each Brazilian state has its own ITCMD law, but all of them must comply with the limits set by the Federal Constitution.

2. What changed regarding inheritance or gifts involving assets abroad?

Brazil’s Supreme Federal Court (STF) ruled in Theme 825 (RE 851.108/SP) that:

No state may charge ITCMD on inheritance or donations involving a foreign element as long as there is no federal complementary law regulating the matter.

In other words, if the situation has any connection to another country (assets outside Brazil, donor living abroad, inheritance received from abroad, etc.), Brazil still lacks the national complementary law that would authorize states to levy the tax.

3. What counts as a “connection to another country” according to the STF?

Examples include:

• Inheritance of assets located abroad (real estate outside Brazil, offshore investment accounts, a global account holding foreign assets);

• A donation made by someone who lives abroad to someone in Brazil;

• A donation of assets located abroad, even if both donor and recipient live in Brazil.

In all these cases, the Constitution requires a federal complementary law for ITCMD to be charged—and that law still does not exist.

4. So is ITCMD prohibited for any inheritance or gift?

No. The distinction is:

• Assets located in Brazil → ITCMD still applies, under each state’s law.

• Assets located abroad or inheritance/gifts with an international element → states cannot charge ITCMD because the federal complementary law is missing.

The São Paulo Court of Justice (TJ-SP) has already recognized this in several cases, declaring ITCMD unenforceable over:

• succession of assets abroad;

• donations of investments held abroad;

• donations by a donor residing abroad;

• shares/units in investment funds, corporate equity interests, and offshore and trust structures connected to assets abroad.

5. Did the tax reform (Constitutional Amendment 132/2023) change this?

For now, no.

Constitutional Amendment 132/2023 reorganized the Brazilian tax system, but it:

• did not remove the need for a complementary law for ITCMD with a foreign element;

• did not validate state laws that were already unconstitutional.

The STF and TJ-SP have expressly stated that EC 132/23 did not “save” those state laws. A new federal complementary law is still required for states to tax inheritances and gifts involving assets abroad.

6. I have foreign investments through a global account. If I die, will my heirs pay ITCMD in Brazil?

Under the current scenario:

• In Brazil: Generally, no ITCMD applies to investments that are legally located abroad (for example, stocks and funds held at a U.S. broker), because there is no federal complementary law authorizing that taxation.

• Abroad: There may be inheritance tax in the country where the assets are located (for example, U.S. estate tax above certain thresholds on U.S.-situated assets).

Also:

• The STJ understands that assets located abroad are not included in probate proceedings conducted in Brazil—succession of those assets follows the law and procedures of the country where they are located.

In practice, your heir will likely not pay ITCMD on those foreign investments, but may need to:

• open a succession/probate procedure abroad;

• pay local inheritance tax (if applicable), and then repatriate the assets to Brazil.

7. I gifted units/shares/investments located abroad. Do I have to pay ITCMD?

If the asset is abroad, there is no federal complementary law regulating ITCMD for these cases. Therefore, the currently consolidated position is:

The state cannot charge ITCMD.

TJ-SP, for example, has ruled ITCMD unenforceable in cases such as:

• donation of an investment “portfolio” located abroad;

• donation of company quotas by a donor residing in Portugal;

• donation of fund units or amounts held abroad.

8. What if the donor lives outside Brazil, but the asset is in Brazil?

That is different.

Example: your father lives in Portugal and gifts you a property in São Paulo.

• The asset is in Brazil;

• The taxable event is treated as “domestic” (without requiring the complementary law for foreign assets).

In these cases, courts have tended to find ITCMD may apply because the tax falls on assets located in Brazil—even if the donor lives abroad—while also observing any rules in the donor’s country of residence that may apply to that situation.

9. I already paid ITCMD on an inheritance/gift involving assets abroad. Can I get it back?

It depends on the specific facts, but in general: if you paid ITCMD on foreign assets or on a transaction with a foreign element based on a state law now considered unconstitutional—and after the STF decisions (especially after 04/20/2021)—there is often strong legal ground to seek a refund (repetition of undue payment).

You must analyze:

• the payment date (tax limitation periods are usually 5 years);

• the type of transaction (inheritance vs. gift; assets in Brazil vs. abroad);

• whether there are sufficient documents to prove the facts.

That is why individualized technical review is essential.

10. The state is demanding ITCMD on assets abroad. What can I do?

Common paths include:

Writ of Mandamus (Mandado de Segurança)

To avoid payment when the Treasury conditions registration, estate distribution, or any act on paying ITCMD over foreign assets.

Requesting:

• an injunction to prevent enforcement;

• recognition of the clear legal right not to pay ITCMD until a federal complementary law exists.

Administrative defense / appeal

If there is an assessment notice, tax assessment, or disallowance in administrative proceedings.

You argue the unconstitutionality and the lack of complementary law before the relevant administrative tribunal (such as TIT-SP).

Judicial action to recover undue payment

When the tax has already been paid and the goal is to recover the amounts.

In all these approaches, the foundation is the same: STF Theme 825, subsequent decisions, and recent case law from state courts.

11. What about offshore companies and foreign trusts?

Even when assets are under:

• offshore companies (BVI, Cayman, etc.);

• foreign trusts;

courts have understood that if the transfer involves a person abroad or assets abroad, it falls under Article 155, §1º, III of the Constitution.

Therefore: without a federal complementary law, the state cannot charge ITCMD on that inheritance/gift with an international element—even if there is a corporate or fiduciary structure abroad. That is the current understanding.

12. If there is no ITCMD in Brazil, does that mean there is no tax at all?

Not necessarily.

You must distinguish:

• ITCMD in Brazil: currently does not apply to cases with a foreign element due to lack of complementary law;

• Inheritance/gift taxes abroad: may exist and be significant (for example, U.S. estate tax above certain limits on U.S.-situated assets).

So you may not pay ITCMD in Brazil and still face tax abroad.

13. What should I do if I have assets abroad (or plan to invest abroad)?

Minimum precautions:

Organize documentation

Statements, international account contracts, broker information, and clear records of where the assets are legally located.

Plan succession

Consider whether you need a will in Brazil and/or abroad;check whether the institution allows beneficiary designations (similar to “Transfer on Death”);for larger estates, consider a holding company, trust, or other vehicles—always considering Law 14.754/2023 (taxation of investments abroad).

Talk to your family

Make sure heirs are aware the foreign assets exist to prevent them from being missed later.

Seek specialized guidance

With rapidly evolving case law and an ongoing tax reform process, specialized legal and tax advice is essential to avoid surprises—both in Brazil and abroad.

Recent STF and court decisions make it clear that inheritances and gifts involving foreign assets cannot be treated as ordinary ITCMD cases.

There is a significant legislative gap, some state laws have been declared unconstitutional, and at the same time many taxpayers continue to face assessments, pressure to pay, or obstacles to registering estate distributions and transactions.

For those who have global accounts, foreign brokerage investments, equity interests in foreign companies, foreign real estate, trusts, or offshores; those beginning international estate planning; or those already being assessed or charged by a state tax authority due to foreign assets, it is crucial to have technical representation that combines tax law, succession/family law, and practical understanding of international financial structures.

Piva Advogados works precisely at this intersection: we advise families, entrepreneurs, and investors on asset organization, dispute prevention, and—when necessary—administrative and judicial defense against improper ITCMD charges involving foreign assets.

If you identify with any of the situations described in this FAQ or have specific questions about your case, contact us for a confidential, personalized review.