Your family holding company carries R$ 10 million in book equity. Since January 14, 2026, that number no longer governs. What governs now is how much cash the company generates — and what its goodwill is worth.
What happened
Complementary Law 227 of January 13, 2026, published in the Diário Oficial da União on January 14, established national rules for ITCMD. Article 154, item II, changed how quotas and shares that are not publicly traded must be valued:
"the tax base shall be calculated using a technically sound methodology appropriate to the quotas or shares, including a technical method that contemplates any prospective cash generation of the enterprise, and the value shall correspond, at a minimum, to net equity adjusted by marking assets and liabilities to market, plus the market value of goodwill, as established in the legislation of the taxing entity."
The technical read
Three layers operate here, and each pushes the tax base upward.
The first is the replacement of book value with market value. For decades, Brazilian practice valued holding company quotas at the net equity shown on the balance sheet — a figure that, for a property acquired in 1998 and never revalued, bears little relation to reality. Article 154, II ends that. Assets and liabilities go to market.
The second is goodwill. The statute does not say "consider"; it says "plus the market value of goodwill." For a purely real-estate holding company, the effect is modest. For a holding company that owns an interest in an operating business — the family company, the retail chain, the clinic, the distributor — the effect lands directly on a figure that never appeared on any balance sheet.
The third, and the most consequential, is the phrase "at a minimum." Adjusted net equity plus goodwill is not the tax base. It is the floor. Above that floor, the statute expressly authorizes a methodology contemplating "prospective cash generation of the enterprise" — which, in valuation terms, is discounted cash flow. A profitable company is usually worth far more under that method than the sum of its assets.
One methodological point separates diagnosis from alarm: LC 227/2026 sets national standards. Article 154, II expressly defers to "the legislation of the taxing entity." The practical effect depends on how each state implements it. But the direction is set, and it runs one way.
If you are outside Brazil, this reaches you. Under Article 159 of LC 227/2026, jurisdiction over movable property — and quotas of a Brazilian company are movable property — follows the domicile of the donor or the deceased, not the location of the asset. If the donor is domiciled abroad, jurisdiction shifts to the state where the recipient is domiciled. A U.S.-resident heir to quotas in a São Paulo holding company is squarely inside this rule.
Who this affects
- Anyone holding a family holding company with an interest in an operating business
- Anyone planning to gift quotas to children, with or without retained usufruct
- Anyone whose succession plan was built on book-value appraisals
- Anyone who owns a sociedade limitada directly and has done no planning at all
- Heirs of a deceased partner whose Brazilian probate is still open
- Non-residents who hold Brazilian assets through a Brazilian holding structure
What to do, and by when
- Establish the current market value of the holding company's assets — particularly real property acquired more than ten years ago, which is typically carried at a fraction of what it is worth.
- Estimate the goodwill of any operating companies held. This is the variable that surprises, because it never appeared on a balance sheet.
- Identify the competent state — for movable property, the state of the donor's or decedent's domicile, not necessarily where the assets sit.
- Revisit appraisals prepared before 2026. A 2023 valuation report built on the prior methodology will not support a new transaction.
- Re-examine transactions in progress. Staged gift programs designed under the old logic need to be recalculated under the new one.
The cost of doing nothing
A tax base reassessed years later, applying the new methodology to a transaction structured under the old one, arrives with penalties and interest attached. The gap is rarely small.
Background for readers outside Brazil
Four things make the rest of this document legible.
ITCMD is Brazil's inheritance and gift tax. It is a state tax, not a federal one — each of Brazil's 26 states and the Federal District sets its own rate and rules, within a federal ceiling currently fixed at 8% by the Senate. There is no lifetime exemption comparable to the U.S. federal estate tax exclusion. The tax falls on the recipient, not the estate.
Brazil is in the middle of the largest tax overhaul in its modern history. Constitutional Amendment 132/2023 replaced five consumption taxes with two value-added taxes — IBS (state and municipal) and CBS (federal). The transition runs from 2026 through 2033. 2026 is a test year: invoices must carry the new taxes, but the tax itself is generally not collected.
Two Complementary Laws govern all of this. Lei Complementar 214/2025 created the IBS and CBS. Lei Complementar 227/2026, enacted January 13, 2026 and published January 14, 2026, created the national rules for ITCMD and amended parts of LC 214/2025. A Complementary Law sets binding national standards; states then legislate within them.
A holding familiar is a Brazilian holding company — usually a sociedade limitada, the closest analogue to a U.S. LLC — used to hold family real estate and operating businesses and to organize succession. Its ownership units are called quotas. It is the single most common estate-planning vehicle in Brazil, and three of the five pieces below concern it directly.
Editorial record
-
Pillar: 1 — Wealth under fiscal pressure
-
Related service (performed in Brazil): holding company revaluation and succession plan review
-
Editorial tier: Gold
Sources: LC 227/2026, art. 154 — Planalto · Brazilian Senate news release, January 14, 2026
Notice
The above is provided for informational purposes only, in accordance with Provimento No. 205/2021 of the Brazilian Bar Association (OAB). The practical guidance is general and does not substitute for analysis of a specific matter. Artificial intelligence assisted in research and drafting, under the responsibility of the signing attorney, in accordance with Recommendation No. 001/2024 of the Federal Council of the OAB.
Scope
This content addresses Brazilian law only. Matters governed by foreign law are handled in partnership with lawyers licensed in the relevant jurisdiction.
Verification record
All provisions were verified against the official text published by the Presidency of Brazil and the Diário Oficial da União on August 6, 2026. Verification corrected six statements circulating in secondary analyses:
- LC 227/2026 was enacted January 13, 2026 and published January 14, 2026 (republished January 15, corrected January 23).
- The gift aggregation rule is in Article 155, not Article 157, which addresses taxpayers.
- Mandatory electronic invoicing for real property rentals is December 1, 2026, not August 1 or 3, 2026.
- CBS does not reach its full rate in 2027: Article 347 of LC 214/2025 provides a 0.1 percentage point reduction for 2027–2028.
- 26.5% is not a rate — it is a review trigger under Article 475, § 11. Reference rates will be fixed by Senate resolution under Article 349.
- Residential rentals of up to 90 days carry a 40% reduction, not 70%, and lose the social reducer (Articles 253 and 281, against 260 and 261).
State caveat: progressive ITCMD rates depend on state legislation. São Paulo still applies the flat 4% rate of State Law 10.705/2000, with a bill pending to introduce progressivity.
A note on the English edition
These pieces are adaptations, not translations. Legal citations retain their Portuguese designations, since those are what a Brazilian court, notary, or tax authority will recognize.
About the firm
Andrade & Cintra Advogados is a boutique law firm dedicated to Civil, Corporate and Real Estate Law, with a focus on Family and Succession Law, concentrated on estate and succession planning, the structuring of family and asset-holding companies, corporate governance and the organization of wealth for succession purposes — always with business purpose, substance and legal compliance. International practice in cooperation with Sintra Legal & Partners.
About the author
Dr. J. Guilherme de Andrade Cintra — Founding Partner · OAB/SP nº 220.915. Editorial co-authorship assisted by artificial intelligence (Anthropic Claude) as editor, under the review and responsibility of the signing attorney.
Talk to us
- WhatsApp: (11) 92499-0086
- E-mail: jgac@cintraadvogados.com
- Address: Av. João Paulo Ablas, 1575 — Granja Viana — Cotia/SP — CEP 06711-250
- Website: www.andradecintra.com.br
Need a reading of your specific matter? Contact the firm and schedule a diagnosis.
