The tax reform changed the inheritance and gift tax in two ways that bear directly on the wealth of business-owning families: ITCMD progressivity became mandatory in every state, and the tax base, as a general rule, became the market value of assets and rights — including holding-company quotas, which were historically transferred at book value. The national rule is already in force, but it is not self-applying: each state still has to enact its own law, subject to the anteriority principle. It is this lag that opens a window, concentrated in 2026, to reorganize wealth and bring succession forward under bases that are still favorable — a silent window that closes without warning on the day the state publishes its own rule.
EC 132/2023 made ITCMD progressivity mandatory (Federal Constitution, art. 155, §1º, VI), where it had been optional; the 8% ceiling remains set by a Senate Resolution (Resolution nº 9/1992). LC nº 227/2026, published on January 14, 2026, established the general rules of the tax: the tax base, as a rule, is the market value on the date of the taxable event, and for quotas of companies not traded on an exchange it set a valuation floor — net equity adjusted to market value, plus goodwill — which erodes the historical advantage of transferring holding quotas at book value. For exchange-traded shares, the prior day’s quotation applies. The same law ruled out ITCMD on the extinction of usufruct: the tax is paid once, at the gift, on the bare ownership. Because everything depends on a state law subject to annual anteriority and the ninety-day rule, there is a window for wealth reorganization concentrated in 2026. There is, however, legal controversy over the basis for the quotas (Conjur, June 2026), and serious planning does not treat it as a certainty.
What changed: from supporting actor to lead role in succession
For decades, the ITCMD — the tax on transfers by death and gift, levied by the states and the Federal District — was treated as a secondary cost of probate and gifting: low rates in several states, a tax base frequently tied to fiscal or book values, and no obligation of progressivity. The reform changed that scenario along two simultaneous axes, and the sum of the two is what turns the tax into a central piece of any succession planning.
The first axis is constitutional. EC 132/2023 made ITCMD progressivity mandatory in every state — it used to be an option that many did not exercise (Federal Constitution, art. 155, §1º, VI). The tax can no longer be charged at a single flat rate; it must be tiered according to the value transferred, and the 8% ceiling continues to be set by Senate Resolution. States that charged a flat 4% tend to migrate to progressive brackets that reach higher levels on larger transfers.
The second axis is the complementary law of general rules. LC nº 227/2026, published on January 14, 2026 — the result of converting PLP 108/2024, already sanctioned — established that the ITCMD tax base, as a general rule, is the market value of the asset or right on the date of the taxable event. This is where the impact on business-owning families concentrates: the rule reaches the quotas and shares of companies not traded on an exchange, precisely the asset around which succession planning via a holding company was built for decades.
Mandatory progressivity and the 8% ceiling
Before EC 132/2023, the STF had already accepted ITCMD progressivity as compatible with ability to pay. What the amendment did was turn that possibility into an obligation: no state can charge the tax at a flat rate anymore. The consequence is twofold. On one hand, lower-value transfers may fall into milder initial brackets; on the other, large transfers — exactly the case of family holding companies — are pushed toward the top of the scale.
How the states structure the rates
The concrete design of the brackets is each state’s competence, within a common ceiling. The maximum limit of 8% remains set by Federal Senate Resolution nº 9/1992 — LC 227/2026 did not change that competence, although there is discussion in Congress about a possible increase of the ceiling. States that already operated with progressivity before the reform, such as Minas Gerais, Rio de Janeiro and Santa Catarina, start from an advanced point; others, which kept a single rate (typically 4%), will have to build the scale. São Paulo, for example, is discussing a migration from a flat 4% to brackets that range from initial levels up to 8% according to the value transferred.
The basis for holding quotas: the end of transfer at book value
The asset-holding company always had a specific advantage in succession: by contributing real estate and equity interests into a company’s capital and gifting the quotas to the heirs, the family transferred quotas — and the ITCMD base usually tracked the book value of those quotas, frequently far below the market value of the underlying assets. It was a legitimate saving, widely used in succession planning.
LC nº 227/2026 targets precisely this point. For quotas and shares of companies not traded on an exchange, the law requires the tax base to be determined by a technically sound methodology, setting a minimum value: net equity adjusted by the valuation of assets and liabilities at market value, plus the market value of goodwill. It is not the automatic application of a ready-made number — it is a valuation floor, a minimum criterion below which the base cannot fall. For exchange-traded shares, the rule is objective: the quotation of the day before the taxable event.
The mechanics of valuation at market value
In practice, determining the minimum base takes three steps. First, start from the book net equity — assets minus liabilities as recorded on the balance sheet. Second, adjust each asset and liability to market value: the property recorded at its 1998 acquisition cost is remarked to its current value; equity interests are revalued; liabilities are brought to present value. Third, add the goodwill — the intangible value tied to the business, the client base, the brand and the capacity to generate results, where it exists. The result is the floor. The effective base can be higher if the sound methodology points to a greater value, but it cannot be lower.
The gift with reserved usufruct: tax paid only once
The gift of assets with reserved usufruct is one of the most used structures in lifetime succession: the parents gift the bare ownership to the children and reserve the usufruct for themselves — the right to use the asset and to receive its fruits while they live. Historically, in several states, this generated a costly controversy: some tax authorities charged ITCMD in two stages — one on the gift of the bare ownership and another on the extinction of the usufruct, when ownership consolidated in full in the donees’ hands.
LC nº 227/2026 settled this point in the taxpayer’s favor: the law rules out ITCMD on the extinction of the usufruct and on the consolidation of full ownership. The practical result is significant — the tax is paid only once, at the moment of the gift, and on the value of the bare ownership transferred, which is a fraction of the asset’s full value, not the whole asset. When the usufruct is extinguished, there is no new taxable event.
The two-stage mechanics that ceased to exist
It is worth understanding why this matters in numbers. Under the old logic of two taxable events, the first incidence fell on the bare ownership (a fraction of the value) and the second, on the extinction of the usufruct, fell on the value of the usufruct itself as it consolidated — so that, adding the two stages, taxation tended to reach, over time, the asset’s full value. With the new rule, the second stage disappears: the tax falls only on the gifted fraction (the bare ownership) and the later consolidation is neutral. In long-horizon transfers, the difference between paying on a fraction once and paying on the whole in two stages is substantial.
The 2026 window: why the national rule does not yet close the door
The point that defines the urgency is technical, but decisive: LC nº 227/2026 sets general rules, and EC 132/2023 establishes the obligation of progressivity — but neither of the two is self-applying. ITCMD is a state tax. To charge full progressivity and the new market base, each state has to enact its own law, and that law is subject to the principles of annual anteriority (it only applies in the year following publication) and the ninety-day rule (it only applies ninety days after publication) — the two periods run together, and the one that ends last prevails.
The requirement of a state law is not a formal detail. The STF, in ruling on General Repercussion Theme 825 (RE 851.108/SP), held that the states cannot charge ITCMD in cases that depend on a national complementary law without that law existing — a precedent that reinforces the reading that the state competence, even now regulated by LC 227/2026, still has to be exercised through each entity’s own law. Without a state law enacted and in force, there is no basis for charging under the new rules.
From this lag the window is born. While the state of domicile does not publish its rule — and most have not yet — the current state rules apply, in many cases with a more favorable tax base and without full progressivity. It is in this interval, concentrated in 2026, that wealth reorganization, the structuring of gifts and bringing succession moves forward can be done under bases that are still advantageous. A state law published in 2026, respecting the two anteriority periods, would only take effect on January 1, 2027 — which reinforces that the door remains open while the state does not legislate.
It is the quietest window in the reform calendar: there is no public notice, no disclosed deadline and no administrative alert. When the state publishes the law, it respects anteriority — but the door to reorganize under the old rules closes from the moment of publication. That is why reading the tax reform planning windows calendar places succession among the decisions to address still in 2026, and not as a 2033 agenda item.
The status by state: who has already legislated and who has not
The state map is heterogeneous, and that is what defines how much of the window remains in each domicile. In broad terms, three groups take shape — and each family needs to identify which one their state is in.
States that already operated with progressivity
States such as Minas Gerais, Rio de Janeiro and Santa Catarina already adopted progressive rates even before EC 132/2023 — for them, the progressivity axis is less of a novelty, and attention turns mainly to the new market base for the quotas, which still depends on state legislative adjustment.
States that charged a single flat rate
States that kept a flat rate — São Paulo among them, historically at 4% — need to build the progressive scale required by the amendment. São Paulo is discussing brackets that start at initial levels and reach the 8% ceiling, with a particularly sensitive impact on large transfers. While the state law is not published and has not cleared anteriority, the current rule continues to apply.
The common denominator: the market base for quotas still depends on a state law
Regardless of the stage of progressivity, applying the market base to the quotas — the most sensitive point for holdings — depends on each state incorporating the rule into its legislation, subject to the anteriority periods. This is why even already-progressive states may have an open window for corporate reorganization: progressivity is one thing; the market base for the quotas is another.
Reorganization playbook: what to do within the window
The window is only worth something if it is filled with structured moves. It is not about “gifting everything in a hurry” — it is about bringing forward, with proper grounding, succession decisions that would come anyway, capturing the current base and rate before the state legislates. The most common moves:
1. Gift of quotas with reserved usufruct
The classic move gains strength in the new scenario: gift the bare ownership of the quotas to the heirs and reserve the usufruct to the donors. The parents keep control and the fruits (dividends, management) while they live; ITCMD falls once, on the fraction of the bare ownership, and the future consolidation generates no new tax. Done under the state’s current base, before the new law, the cost tends to be lower than after adjustment to the market base.
2. Structuring or adjusting the holding before the new base
For families that do not yet have a holding, there is the decision to set one up and contribute the wealth into it; for those that already have one, there is a review of capital, governance and clauses. In both cases, the design must anticipate the valuation methodology that will be required — not to “hide” value, but so that the determined base is defensible and the operation withstands challenge.
3. Planned succession in advance
Reorganizing wealth during life — early partition, staggered gifts, a quotaholders’ agreement — allows the wealth to be distributed over time and within the rules in force, instead of concentrating the transfer in probate, under rules that tend to be more onerous. The planning integrates ITCMD, family governance and, as will be seen below, the new taxation of dividends.
The reform did not make the holding obsolete — it made its design more demanding. What used to be solved with a book-value spreadsheet now calls for technical valuation, a reading of the state calendar and a decision taken within the window, not after it.
TaxUp Team · Tax Practice
The interaction with the new taxation of dividends
Wealth planning in 2026 cannot look at ITCMD in isolation, because the same reform also changed the taxation of the income the holding distributes. Lei nº 15.270/2025 introduced, from January 2026, the taxation of dividends that were exempt in Brazil for decades.
What changed in the holding’s income
Under the new rule, dividends and profits paid by the same legal entity to an individual resident in Brazil, when above R$ 50 thousand per month, become subject to 10% withholding income tax (IRRF) at source. In parallel, a minimum individual income tax (IRPFM) was created, levied on those who earn high annual income — from R$ 600 thousand — with a progressive rate that reaches up to 10% for annual income of R$ 1.2 million or more. The holding, which often works as the vehicle through which the wealth’s income reaches the family, ceases to be an automatically exempt path.
Illustrative example: a family holding within the window
Consider an asset-holding company that owns real estate acquired decades ago and recorded at historical cost. The book net equity of the quotas is modest — say, a fraction of the real value of the properties, which have appreciated strongly. Under the old logic, the gift of the quotas to the heirs would have that reduced book value as its base, and the rate could be flat and low.
Under the new rules, when the state of domicile legislates, two effects add up. First, the base ceases to be the book value and moves to the market floor: the properties are remarked to current value and goodwill is added, raising the base. Second, the rate ceases to be flat and tiers along progressivity, possibly reaching the top in the higher-value brackets. The combination — a larger base multiplied by a higher rate — can represent a significant difference compared with the cost of the same transfer made today.
The move within the window would be to structure, still under the state’s current rules, the gift of the quotas with reserved usufruct: the parents keep control and fruits, ITCMD falls once on the bare ownership and the future consolidation generates no new tax. The operation must be documented with a valuation by a sound methodology and robust grounding, precisely because the basis for the quotas is the object of controversy — which leads us to the next point.
The constitutional controversy: what is still open
Technical honesty requires recording what is not settled. The taxation of holding quotas on the basis of net equity adjusted to market value plus goodwill is legally challenged. In an article published in the specialized press in June 2026 (Conjur, 12/06/2026), it is argued that this base, as designed, runs up against the Constitution.
The three central arguments
The unconstitutionality thesis rests on three fronts. The first is the conceptual distinction: the “market value” of a minority quota or one that is hard to sell takes into account liquidity, a control premium (or discount) and circulation restrictions, and is not the same as the simple sum of the underlying assets plus goodwill — they are magnitudes that only resemble each other, and equating them would encroach on the definition of the tax base. The second is strict legality: while the state law does not define the concrete valuation criteria, there is no basis for charging. The third is the settled case law that, in part of the courts, recognizes net asset value as a legitimate base for the transfer of quotas. The debate also touches on STJ Theme 1.371, on determining the base through a regular adversarial procedure.
The firm records this controversy as an open point, not as a promise. Serious succession planning does not sell an unconstitutionality thesis as if it were a guaranteed outcome — it may prevail, it may be modulated, it may not be accepted. What the existence of the controversy recommends is the opposite of inertia: structuring the operation with robust grounding, documenting the valuation with a sound methodology and preserving the thesis for possible discussion, without conditioning the wealth decision on a result that does not yet exist.
Table: what changed and what to do about it
| Dimension | Before the reform | With EC 132 and LC 227/2026 |
|---|---|---|
| Progressivity | Optional — many states on a single flat rate | Mandatory in every state; 8% ceiling (Senate Resolution nº 9/1992) |
| Tax base (general rule) | Variable, frequently tied to fiscal value | Market value on the date of the taxable event |
| Holding quotas (off-exchange) | Tended to track book value | Floor: net equity at market value + goodwill |
| Exchange-traded shares | No uniform national rule | Quotation of the day before the taxable event |
| Extinction of usufruct | Controversy — some states charged ITCMD | No incidence — tax paid once, at the gift |
| Effective entry into force | — | Depends on a state law (annual anteriority + ninety-day rule) |
The second table summarizes the practical sequencing of the window — what to check and in what order before deciding.
| Step | What to check | Why it matters |
|---|---|---|
| 1. State of domicile | Stage of the state legislation and bills under way | Defines how much of the window remains |
| 2. Wealth valuation | Market value of the assets and the quotas against the current base | Measures what is at stake between acting now or later |
| 3. Design of the operation | Gift of quotas, reserved usufruct, succession in advance | Defines the structure and the ITCMD cost |
| 4. Grounding | Sound valuation methodology and documentary robustness | Sustains the operation against the controversy |
| 5. Income (dividends) | Impact of Lei 15.270 on the distribution of results | Integrates ITCMD and income tax into the same decision |
Crossing these changes with each family’s concrete structure is the work of tax planning applied to succession, and the correct corporate structuring is the subject of asset and family holding companies. It is also worth recalling that LC 227/2026 itself created the IBS and CBS Steering Committee, a sign that the same law that reorganizes consumption also rewrote the general rules of wealth transfer.
Checklist and risks: how not to miss the window
The decision to act within the window has a clear opportunity cost: the alternative — waiting — may mean paying for the transfer under a market base and a ceiling rate. But acting badly also carries risk. The points to watch:
Checklist before bringing forward
Before any move, it is prudent to confirm: (1) the legislation of the state of domicile and the stage it is in, including bills under way; (2) the market value of the assets and the quotas against the base used today; (3) the design of the reserved usufruct and who will keep control and fruits; (4) the impact of mandatory progressivity on the value bracket of the transfer; (5) the robustness of the valuation methodology in light of the controversy over the basis for the quotas; (6) the interaction with Lei 15.270 in the distribution of dividends.
The risks to avoid
There are three main risks. The risk of inertia — missing the window because the state legislated before the family acted. The risk of a badly done rush — structuring the operation without a defensible valuation, exposing it to arbitration and assessment. And the risk of selling the controversy as a certainty — conditioning the decision on an unconstitutionality thesis that has no outcome yet. The balance lies in acting with grounding, neither acting on impulse nor postponing out of indecision.
Frequently asked questions
What changes in ITCMD with the tax reform?
Two central points. EC 132/2023 made ITCMD progressivity mandatory in every state — it used to be optional —, with an 8% ceiling set by a Senate Resolution (Resolution nº 9/1992). And LC nº 227/2026 established that the tax base, as a general rule, becomes the market value of the asset or right on the date of the taxable event, reaching even the quotas of companies not traded on an exchange.
How is the tax base for the quotas of a holding company determined?
For quotas and shares of companies not traded on an exchange, LC 227/2026 sets a minimum valuation: net equity adjusted by the valuation of assets and liabilities at market value, plus the market value of goodwill. It is a floor, determined by a technically sound methodology — not an automatic number. This erodes the historical advantage of transferring holding quotas at book value. For exchange-traded shares, the base is the quotation of the day before the taxable event.
Will a gift with reserved usufruct be taxed twice?
No. LC 227/2026 rules out ITCMD on the extinction of the usufruct and on the consolidation of full ownership. The tax is paid only once, at the moment of the gift, and on the value of the bare ownership transferred — a fraction of the asset’s full value —, not on the whole asset. When the usufruct is extinguished, there is no new taxable event, eliminating the old two-stage charge.
What is the ITCMD rate ceiling and how do the states structure the brackets?
The ceiling remains at 8%, set by Senate Resolution nº 9/1992, which LC 227/2026 did not change — although there is discussion in Congress about raising it. Within that limit, each state defines its progressive brackets. States such as Minas Gerais, Rio de Janeiro and Santa Catarina already operated with progressivity before the reform; others, such as São Paulo, which kept a single rate, need to build the scale — in São Paulo, the discussion involves brackets reaching the 8% ceiling.
Why is 2026 a window to reorganize wealth?
Because the national rule is already in force, but it is not self-applying. Each state has to enact its own law to apply full progressivity and the market base, and that law is subject to annual anteriority and the ninety-day rule. While the state of domicile does not publish the rule, the current rules apply, in many cases more favorable — and it is in this interval, concentrated in 2026, that reorganization can be done. A state law published in 2026 would only take effect, at the earliest, on January 1, 2027.
When does this window close?
It closes when the state of domicile publishes its law adopting the market base and full progressivity. There is no public notice and no advance warning: it is the quietest window in the reform calendar. Because it respects anteriority, the new state rule only takes effect in the following year, but the possibility of planning under the old rules ends with the publication of the law.
Is the taxation of holding quotas at market value definitive?
There is controversy. In a Conjur article from June 2026, it is argued that this base runs up against the Constitution — among other reasons, because “market value of the quota” and “sum of assets plus goodwill” are distinct magnitudes, and because the charge depends on a state law that defines criteria. It is an open point, which may or may not prevail. Serious planning does not treat the thesis as a certainty: it structures the operation with robust grounding and preserves the right to dispute.
How does the new taxation of dividends affect the holding’s planning?
Lei 15.270/2025 began to tax, from January 2026, dividends paid by the same legal entity to a resident individual above R$ 50 thousand per month, with 10% IRRF, and created a minimum income tax for high annual income (from R$ 600 thousand, with a progressive rate up to 10%). Since the holding is usually the vehicle for distributing the wealth’s income, ITCMD and dividends have become two sides of the same decision — the distribution calendar and the design of the usufruct enter the equation.
Has the asset-holding company stopped making sense?
No. The reform did not make the holding obsolete — it made its design more demanding. The structure remains relevant for governance, asset protection and succession organization; what changed is that the ITCMD saving from book value no longer operates as it once did, and the operation now requires technical valuation, a reading of the state calendar and timing.
What to consider before bringing a gift forward in 2026?
The legislation of the state of domicile and the stage it is in, the market value of the assets and the quotas against the current base, the design of the reserved usufruct, the impact of mandatory progressivity on larger transfers, the robustness of the grounding in light of the controversy over the basis for the quotas, and the interaction with the taxation of dividends. It is a case-by-case decision that combines a wealth valuation with a legal reading.
We map the ITCMD window for your wealth
TaxUp assesses the family’s structure, reads the stage of the legislation in the state of domicile and quantifies what is at stake between reorganizing now or after the new law — in an initial meeting, at no cost.
Sources: EC 132/2023 (planalto.gov.br); LC 227/2026 (planalto.gov.br/ccivil_03/leis/lcp/lcp227.htm); Federal Constitution art. 155 §1º VI; Senate Resolution nº 9/1992 (8% ceiling); Lei nº 15.270/2025, taxation of dividends (planalto.gov.br); STF, Theme 825 (RE 851.108/SP); STJ, Theme 1.371; controversy over the basis for the quotas (Conjur, 12/06/2026). Informational content; not legal advice.
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