Brazil ITCMD Inheritance Tax and the 2027 Reform: Foreigners

If you are a foreigner with property, accounts, or family in Brazil, the way your estate will be taxed and divided here is about to change. A reform years in the making has reached its implementation phase: Complementary Law No. 227/2026 was enacted in January 2026, and the states are now legislating the new progressive rate schedules that will take effect — under the constitutional prior-notice rules — in 2027 for most of them. The people most affected are often the least likely to hear about it in time: foreign owners of Brazilian assets, and the heirs abroad who will one day inherit them.

This guide explains, in plain English, how Brazil’s state inheritance and gift tax (ITCMD) works today, what the reform requires, what changed for cross-border estates, and why some families look at the months before the new rates apply as a window to review their structure. It is educational content prepared by our tax and estate team at ZS Advogados Associados. It is not advice for any particular estate, and every figure should be confirmed against the current rules in the relevant state and circumstances.

Does Brazil have an inheritance tax?

Brazil has no federal estate tax. There is no nationwide levy on the estate as a whole, the way some countries impose one. Instead, the tax on passing wealth sits at the state level: ITCMD — Imposto sobre Transmissão Causa Mortis e Doação, the tax on transfers by death and on gifts.

That single fact reshapes how planning works. Because ITCMD is a state tax, the rate, the brackets, and even some of the procedural rules differ depending on which Brazilian state has competence over a given asset. Real estate is generally taxed by the state where the property sits; movable assets follow other connecting factors, including the domicile of the deceased or the heir. Two heirs inheriting from the same person can face different rates if the assets are in different states.

ITCMD reaches two kinds of transfer: inheritances (transmissão causa mortis, on death) and lifetime gifts (doação). The same tax that applies when assets pass through probate can also apply when a parent gives an asset to a child while alive. That symmetry matters for the planning discussion later in this guide.

Legal basis: the states’ power to levy ITCMD comes from art. 155, I of the Federal Constitution. There is no federal estate tax; the tax on inheritances and gifts is a state competence, which is why rates and rules vary across Brazil.

What are the current ITCMD rates by state?

Rates today generally fall between about 2% and 8% of the value transferred, depending on the state. Some states apply a single flat rate; others already use progressive brackets that rise with value. São Paulo, for example, currently applies a flat 4%, while several states — including Ceará, Bahia, Santa Catarina, and Rio Grande do Sul — already use progressive schedules that reach the national ceiling.

That ceiling is the key number: no state may charge more than 8%. This cap comes from Senate Resolution No. 9 of 1992, which sets the maximum ITCMD rate nationwide. States set their own rates and brackets below that ceiling, but cannot exceed it.

The table below is illustrative and uses round figures to show the range. Rates and brackets change, and each state publishes its own schedule, so treat this as orientation only and confirm the current rate with the relevant state’s Secretaria da Fazenda for any specific asset.

State (example)	Rate pattern today	Notes
São Paulo (SP)	Flat, around 4%	Single rate today; pending legislation to adopt progressive brackets under LC 227/2026.
Rio de Janeiro (RJ)	Progressive, up to ~8%	Already uses graduated brackets that can reach the ceiling.
Ceará / Bahia / Santa Catarina / RS	Progressive, up to 8%	Several states already apply value-based brackets.
National ceiling	8% maximum	Set by Senate Resolution No. 9/1992; no state may exceed it.

This table is for orientation only. Confirm current rates and brackets with each state’s finance authority before drawing any conclusions for a specific estate.

The headline to take from this range: a flat 4% and a progressive schedule that tops out near 8% assessed on fair-market value are very different outcomes on a large estate — and the reform is designed to push all states toward the progressive model.

What did EC 132/2023 change, and what does LC 227/2026 require?

The change has two legal layers, and understanding both is important for getting the “2027” timing right.

EC 132/2023 (Constitutional Amendment No. 132/2023) — enacted December 20, 2023 as the Brazilian tax reform — made progressive ITCMD rates mandatory nationwide. The Amendment added the requirement that ITCMD be progressive “in relation to the value of the share, legacy, or gift” into the Constitution itself, removing states’ option to keep a single flat rate. EC 132/2023 also addressed the long-standing impasse on taxing inheritances and donations with cross-border elements: under transitional rules in art. 16 of the Amendment, states may now levy ITCMD on donations from a donor residing or domiciled abroad, and on inheritances of assets located abroad, pending a national complementary law.

Complementary Law No. 227/2026 (LC 227/2026) — enacted January 14, 2026 as part of the broader tax reform package — established the national rules that put the EC 132/2023 mandate into operation for ITCMD. It sets the framework states must follow: progressive rates based on the value of each heir’s or donee’s share, assessment on fair-market value, and the new competence rules for cross-border transfers. LC 227/2026 is in force, but its ITCMD provisions are not self-executing — they establish national standards, and each state must enact its own implementing legislation.

The “2027” timing flows from constitutional rules, not a single national switch-on date. Any rate increase enacted by a state is subject to the anterioridade anual (full-year prior-notice) and the anterioridade nonagesimal (90-day prior-notice) principles. In practical terms, a state that enacts its new progressive schedule during 2026 cannot collect under the higher rates before 2027. The “2027” figure widely reported in legal and financial press reflects this anterioridade window — but each state moves on its own schedule, and some states may implement sooner or phase changes in. Confirm the timeline with the Secretaria da Fazenda of the state that applies to your assets.

Legal basis: progressive ITCMD rates became mandatory under Constitutional Amendment No. 132/2023 (art. 155, §1º, VI of the Constitution); the national implementation framework is in Complementary Law No. 227/2026 (enacted January 14, 2026); the 8% ceiling remains anchored in Senate Resolution No. 9/1992; the prior-notice rules are in art. 150, III, b and c of the Constitution.

Why does the reform create a planning window now?

The simple reason is arithmetic. Moving from a flat rate to a progressive schedule assessed on fair-market value can significantly increase the tax on a high-value estate compared with a flat rate. PwC’s Brazilian tax analysis noted the trend that in states with fixed rates such as São Paulo’s 4%, “the cost of wealth transfer may double because the mandatory progressivity of the tax could reach 8%.” The exact impact depends on the state and the value of each heir’s share — modest estates may see little difference; larger ones may face a materially higher bill.

Some families therefore review their situation while current rules still apply, rather than after a new rate schedule is enacted. The tools people discuss with a professional include lifetime donations (doação), holding companies that own the assets, and usufruct (usufruto), where ownership passes to the next generation while the original owner keeps the right to use the asset for life.

It is important to be precise about what this window is and is not. It is a moment to get informed and, where appropriate, to plan deliberately. It is not a reason to rush. Each tool carries its own tax and legal consequences — a lifetime gift is itself an ITCMD event, a holding company has costs and formalities, and usufruct has its own rules. None is right for every family, and the anterioridade window means there is time to think rather than a reason to act hastily. Whether any of them fits depends entirely on the specific situation and should be reviewed individually before anything is done.

“The shift to progressive ITCMD assessed on fair-market value is a structural change, not a one-off adjustment, and it is why some families look closely at their estate before the new state schedules take effect. The point of planning is not to chase a guaranteed saving — it is to understand, with current rules in front of you, what a future transfer would cost and whether your structure actually does what you think it does.” — Zachariah Zagol, OAB/SP 351.356

What changed for cross-border estates and foreign heirs?

Before EC 132/2023, states were blocked from levying ITCMD on many donations and inheritances involving assets or parties abroad, because the Supreme Court (STF) had ruled that this required a complementary law that did not exist. That created a well-known planning gap. EC 132/2023 closed it — at least structurally — by granting states transitional authority to charge ITCMD on donations from donors residing abroad (competence going to the donee’s state) and on inheritances of assets located abroad (competence going to the state of the deceased’s or heir’s domicile). LC 227/2026 then established the permanent national rules.

What this means in practice is that the cross-border gap that existed before 2023 is narrowing. A donation from a parent living abroad to a child in Brazil, which might not have been taxable by states before the reform, is now within states’ reach once they update their legislation. Foreign heirs receiving Brazilian assets still go through the same inventário process, but the competence rules for any assets located abroad are now clearer.

Important caveat: even with EC 132/2023 and LC 227/2026 in place, a state can only collect ITCMD once it has valid state legislation in effect. Courts have continued to hold that states without updated legislation cannot retroactively charge the tax on those cross-border transfers. The normative gap — between what is now constitutionally permitted and what each state has actually enacted — is still closing, state by state. If your estate has cross-border elements, check whether the relevant state has updated its ITCMD law, and confirm with a qualified professional.

For more on how the broader tax reform affects foreign companies and individuals in Brazil, see our guide to the CBS and IBS tax reform for foreign companies in Brazil.

What is forced heirship (legítima) and how does it affect foreigners?

Brazil does not let a person freely decide who inherits everything. Under the Civil Code, half of the estate is reserved by law for necessary heirs — descendants, ascendants, and the surviving spouse. This reserved half is the legítima, and it cannot be given away by will. The other half (the parte disponível, or disposable portion) can be directed more freely.

For foreigners, this is one of the most surprising features of Brazilian succession. A will drafted abroad that leaves everything to one person, or that disinherits a child, may simply not be enforceable as to Brazilian assets, because it collides with the legítima. The reserved portion belongs to the necessary heirs by operation of Brazilian law, regardless of what a foreign will says.

This interacts directly with planning. Lifetime gifts and other structures cannot be used to quietly defeat the legítima; transfers that strip the reserved heirs can be challenged. Any planning around Brazilian assets has to respect forced heirship — which is exactly why it benefits from professional review rather than a do-it-yourself approach imported from another legal system.

Legal basis: the Civil Code (art. 1.846) reserves 50% of the estate — the legítima — for necessary heirs (descendants, ascendants, and the surviving spouse). A foreigner generally cannot will away that reserved half as to Brazilian assets, even if the law of another country would permit it.

For a broader view of how Brazilian inheritance law works alongside foreign systems, see our guide on international inheritance and Brazilian law, and the companion post on estate asset division and inheritance proceedings in Brazil.

Is there a US–Brazil estate-tax treaty?

No. There is no estate-tax or inheritance-tax treaty between the United States and Brazil. This matters because treaties are the usual mechanism for preventing the same transfer from being taxed twice. Without one, a cross-border estate can face tax in both systems, each applying its own domestic rules.

Where double taxation arises, relief comes only from foreign tax credits under each country’s domestic law — not from a treaty. A foreign tax credit can let tax paid in one country offset tax owed in the other, within limits, but it is narrower and less predictable than treaty relief. The mechanics depend on the assets, the residence of the parties, and the rules in force at the time.

For a US person with Brazilian assets, or a Brazilian estate with US heirs, the absence of a treaty is a reason to map the tax exposure in both countries early. The US federal estate-and-gift system and Brazilian ITCMD operate on different bases, and coordinating them is a job for advisors in both jurisdictions. Our companion post on US taxes while living in Brazil: no comprehensive treaty covers the broader treaty landscape.

For broader context on how Brazilian taxes affect foreigners at every stage, see our guide to finances and taxes for immigrants in Brazil.

Why do US trusts often fail for Brazilian assets?

Trusts are a cornerstone of US estate planning, so it is natural to assume a US trust will carry over to Brazilian assets. In Brazil, it often does not work as expected. Brazilian law has no domestic trust concept, and recent legislation changed how offshore structures are treated for tax.

Under Law No. 14,754/2023, assets held through offshore structures and trusts by Brazilian tax residents are taxed in Brazil, with income and assets looked through to the resident. A US-style revocable trust — where the settlor keeps control and can revoke — is especially exposed, because the law treats the assets as still belonging to the person. The trust’s intended shielding or deferral effect frequently does not materialize, and it can instead add Brazilian tax and probate complications.

This does not mean every structure fails, or that trusts are useless in every cross-border situation. It means a trust set up under another country’s law should be reviewed against Brazilian rules before it is relied on for Brazilian assets or by a person who spends time in Brazil as a tax resident. Assuming it works the way it would at home is the mistake.

For a deeper analysis, see our dedicated guides on trusts in Brazil and on tax planning for foreigners in Brazil.

“A US revocable trust does not behave in Brazil the way it does in the United States. Since Lei 14.754/2023, assets in offshore structures held by Brazilian residents are generally taxed here, and a revocable trust is often looked through entirely. Families are sometimes surprised to learn the structure they relied on does not produce the result they expected — which is why it should be checked, not assumed.” — Zachariah Zagol, OAB/SP 351.356

How does inventário work for foreign heirs?

When someone with Brazilian assets dies, the assets pass through inventário — Brazilian probate. This is the proceeding that identifies the estate, settles debts, assesses ITCMD, and transfers assets to the heirs. For families spread across borders, a few features stand out.

The deadline. The Civil Procedure Code (art. 611 of the CPC) sets a 60-day window from the date of death to open the inventário. Most states impose an ITCMD surcharge — a penalty — if this deadline is missed; in São Paulo the penalty is 10% of the ITCMD for delays past 60 days and can rise to 20% if the delay exceeds 180 days, though penalty rules vary by state. The 60-day clock does not pause for geography: heirs abroad face the same deadline.

CPF for each heir. Foreign heirs need a Brazilian CPF (individual taxpayer number) to take title to assets and to appear in the proceeding. If heirs abroad do not already have one, obtaining a CPF takes time — factor that into the 60-day window.

Document legalization. Foreign documents — above all the death certificate — generally need an apostille under the Hague Convention and a sworn translation into Portuguese performed in Brazil. An apostille alone is not enough; the sworn translation must be done by a public translator registered in Brazil.

Judicial or extrajudicial. Where all heirs are adults, in agreement, and there is no will, an extrajudicial (notarial) inventário may be possible, which is usually faster. Otherwise it runs through the courts. In either route, ITCMD generally must be paid before assets are formally transferred to the heirs.

Our companion post on property inventory and estate proceedings in Brazil covers the procedural steps in more detail. For obtaining CPF and other initial documents, see the guide on CPF for foreigners in Brazil.

Opening an inventário: the general steps

1. Open within the deadline. Start the inventário generally within 60 days of death, to avoid a possible ITCMD penalty — rules vary by state, so confirm the surcharge with the relevant Secretaria da Fazenda.
2. Get a CPF for each foreign heir. Each heir abroad needs a Brazilian taxpayer number to take title and appear in the proceeding.
3. Apostille and sworn-translate documents. The death certificate and other foreign documents generally need an apostille and a sworn translation done in Brazil.
4. Choose judicial or extrajudicial. A notarial inventário may be possible where heirs are adults, in agreement, and there is no will; otherwise it runs through the courts.
5. Value the estate and assess ITCMD. Identify and value the assets, then confirm the ITCMD rate and any progressive brackets in the state with competence over each asset.
6. Pay ITCMD and complete the transfer. Pay the tax and register the transfer; ITCMD is generally due before assets pass to the heirs.

What are the most common mistakes in cross-border estates?

Across cross-border estates involving Brazil, the same avoidable errors recur. Most of them come from assuming Brazil works like the family’s home country.

• Assuming a foreign will or trust controls Brazilian assets. Forced heirship and the absence of a domestic trust concept mean foreign instruments often do not produce the intended result here.
• Ignoring the legítima. Trying to leave everything to one heir, or to disinherit a reserved heir, can be unenforceable as to Brazilian assets.
• Relying on a revocable trust without reviewing it. Since Law No. 14,754/2023, assets in offshore structures held by Brazilian residents are generally taxed in Brazil; the shielding effect may not exist.
• Missing the 60-day probate window. A late inventário can trigger an ITCMD penalty in most states — confirm the local surcharge rule.
• Forgetting the CPF and document legalization. Foreign heirs without a CPF, or with un-apostilled, untranslated documents, can stall a proceeding at a critical moment.
• Assuming a single national ITCMD rate. Rates, brackets, and the reform’s implementation timeline vary by state; the wrong assumption can distort the whole picture.
• Acting before reviewing the legítima. Lifetime gifts and restructuring that strip necessary heirs of their reserved share can be challenged legally.

An illustrative scenario

Hypothetical illustration — not a real client.

Consider a fictional, composite example built only to show how the rules connect. Imagine a foreign retiree who owns an apartment and a brokerage account in a Brazilian state that currently applies a flat 4% ITCMD, with two adult children living abroad. The retiree set up a US revocable trust years ago, assuming it would keep the Brazilian assets out of probate.

Looked at today, several pieces interact. The trust, being revocable and tied to a person who spends time in Brazil, may be looked through under Law No. 14,754/2023, so it does not shield the assets the way the family expected. The legítima reserves half of the estate for the children regardless of the trust’s terms. And once the state enacts its progressive schedule under LC 227/2026, an inheritance that would have been taxed at a flat 4% could face a higher effective rate on the full fair-market value. Reviewing the structure while current rules still apply lets the family see those numbers clearly and decide — with professional input — whether any adjustment makes sense before the new rates take effect.

This example is purely illustrative, with every distinguishing detail invented. Real situations turn on their own facts and require individual analysis. Nothing here is a prediction of any outcome or a promise of any saving.

Deadlines and key terms at a glance

Item	Typical figure / timing	Legal anchor
ITCMD rate range	~2%–8% (varies by state)	CF art. 155, I; Senate Resolution 9/1992 (8% ceiling)
Progressive rates mandatory	Under LC 227/2026 — state by state, most effective 2027	EC 132/2023; LC 227/2026; anterioridade rules
Forced heirship (legítima)	50% reserved for necessary heirs	Civil Code art. 1.846
Open inventário	Generally within 60 days of death (penalty if late)	CPC art. 611; state ITCMD rules
Offshore structures taxed in Brazil	Look-through for residents	Lei 14.754/2023

Key terms

• ITCMD — the state tax on inheritances and gifts; rates from about 2% to 8%, set by each state up to the Senate Resolution 9/1992 ceiling.
• Legítima — the 50% of the estate reserved by law for necessary heirs and not freely willable.
• Inventário — Brazilian probate; generally opened within 60 days of death.
• Doação — a lifetime gift, itself an ITCMD event, sometimes discussed in planning.
• Usufruto — usufruct; the right to use and enjoy an asset while ownership passes to another.
• CPF — the Brazilian taxpayer number foreign heirs need to take title to assets.
• Anterioridade — the constitutional prior-notice principle requiring at least one year (annual) and 90 days (nonagesimal) between a tax law’s enactment and its collection, which shapes when new ITCMD rates actually take effect.
• Foreign tax credit — domestic-law relief used in place of an estate-tax treaty between the US and Brazil.

Key takeaways {#takeaways}

• Brazil has no federal estate tax; the state-level ITCMD taxes inheritances and gifts under art. 155, I of the Constitution.
• The 8% ceiling comes from Senate Resolution No. 9/1992. São Paulo currently applies a flat 4%; several states already use progressive brackets up to 8%.
• EC 132/2023 made progressive rates mandatory nationwide and resolved the cross-border competence impasse. LC 227/2026 (enacted January 14, 2026) established the national framework states must implement.
• The “2027” target reflects the constitutional anterioridade rules — not a federal switch. Each state legislates and implements on its own schedule; confirm your state’s timeline.
• Moving from a flat rate to progressive rates assessed on fair-market value can significantly increase the effective tax on high-value estates.
• Forced heirship (legítima) reserves 50% of the estate for descendants, ascendants, and spouse; a foreign will cannot freely override it as to Brazilian assets.
• There is no US–Brazil estate-tax treaty; only foreign tax credits mitigate double taxation.
• US revocable trusts often fail as expected for Brazilian assets under Lei 14.754/2023.
• Inventário should generally open within 60 days; foreign heirs need a CPF and apostilled, sworn-translated documents.

Related guides on this site

• International inheritance and Brazilian law — cross-border succession, applicable law, and why Brazilian courts apply the legítima to Brazilian assets regardless of foreign wills
• Estate asset division and inheritance proceedings in Brazil — the full inventário process from opening to closing, including the ITCMD payment steps
• Family holding companies and asset protection in Brazil — how a holding familiar works, its tax treatment, and how it interacts with succession
• Property inventory and estate proceedings in Brazil — procedural companion on the Brazilian probate process
• Tax planning for foreigners in Brazil — broader income and wealth tax picture for foreign nationals
• Brazil CBS and IBS tax reform for foreign companies 2026 — the consumption-tax side of the same reform package
• Income tax for foreigners in Brazil — how Brazilian residency triggers income tax obligations, relevant context for estate planning

How ZS Advogados can help

Cross-border estates reward coordination. ITCMD is a state tax with rates and a reform timeline that differ by state, forced heirship overrides foreign wills, the offshore-trust rules can undo a structure you assumed was settled, and there is no treaty to smooth out double taxation. Each piece is manageable on its own; together, they call for a plan rather than a guess.

Our tax and estate team advises foreign nationals and their families on ITCMD, succession, probate, and the way Brazilian rules interact with another country’s system — always anchored in the specific assets, family structure, and state competence that apply to your situation.

• Estate planning — ITCMD, succession structure, inventário, forced heirship, holding companies
• Tax law — cross-border tax analysis, ITCMD assessments, Lei 14.754/2023 offshore structures
• International law — foreign-document legalization, cross-border succession, applicable-law questions

Book a consultation to review your specific structure while the current rules still apply.

Technical review by the ZS Advogados Associados tax and estate team, including founding partner Zachariah Zagol (OAB/SP 351.356) and co-founding partner Karina Peres Silvério (OAB/SP 331.050).

Sources and legal basis

• Constitution of Brazil, art. 155, I — ITCMD state competence
• Constitutional Amendment No. 132/2023 — Tax Reform (mandatory ITCMD progressivity)
• Complementary Law No. 227/2026 — National ITCMD rules
• Law No. 14,754/2023 — Taxation of offshore investments, structures, and trusts
• Senate Resolution No. 9 of 1992 — 8% ITCMD ceiling
• São Paulo State Finance Authority (SEFAZ-SP) — ITCMD
• Civil Procedure Code (CPC), art. 611 — inventário deadline

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This guide is for informational and educational purposes only, in line with Provimento No. 205/2021 of the Brazilian Bar Association (OAB). It is not legal or tax advice, an opinion, or an offer of services, does not refer to any specific case, and does not guarantee any result. Tax rules, rates, and deadlines change and vary by state and individual circumstances; always confirm against official sources and current state legislation. Each situation requires individual analysis by a licensed professional. Last updated June 2026.