By Michele Loureiro
In addition to bringing significant changes to the Brazilian financial system, the Tax Reform (Constitutional Amendment No. 132/2023), approved by the National Congress at the end of 2023, also impacted the conditions for receiving inheritances and donations from abroad.
Since March 2024, it has been necessary to prove the payment of the ITCMD (Tax on Transmission Cause Mortis and Donation), which varies according to the State, for currency exchange operations to be completed and for the beneficiary to access their funds from outside Brazil.
With over 40 years of experience in the market, Ouribank offers a comprehensive platform to assist law firms and individuals with agility, security, exclusive service, and support from the best market specialists in the processes of receiving inheritances and donations from abroad.
Below are the main points to be observed:
For Real Estate: If the donated or inherited asset is real estate, it is necessary to present proof of payment of the ITCMD in the State where the property is located. It is important to remember that the rate varies according to the region.
For Movable Assets:
Donor Residing Abroad: If the donor lives outside Brazil, the tax must be collected in the State where the donee (the person receiving the donation) resides. If the donee also resides abroad, the ITCMD must be paid in the State where the asset is located.
Inheritance: If the deceased person (de cujus) resided in Brazil, the tax must be collected in the State where that person lived. If the deceased person lived abroad, the ITCMD must be paid in the State where the heir resides.
“The new requirements are quite specific and may raise questions. Therefore, we have a highly trained team to analyze specific cases where there is a judicial exemption from the collection of the ITCMD,” says Ricardo Russo, Director of Foreign Exchange at Ouribank.
Step-by-Step Guide for Receiving Inheritances and Donations
Russo lists the basic steps for receiving funds from abroad. The first step, upon discovering that you are the beneficiary, is to prove the relationship with the donor. For example, that it is your mother, uncle, or a partner. “This is the time to collect documents that demonstrate that the donation is formal and that the source of the funds is legitimate,” says Russo.
According to the expert, this is usually the most sensitive phase, as it requires documents and verifications. “At Ouribank, we have the ease of guiding the composition of this ‘dossier’ from the beginning. We have people on the team who deal directly with this and can help with the process, as they are aware of the peculiarities of various countries. It is a convenience for mitigating bureaucracy,” he says.
After the initial phase of gathering documents, the next step is to pay the tax. “At this point, the currency exchange issue begins, where we have the greatest expertise. We can help, for example, find the best time to make the transfer and secure a better rate to increase gains,” says Russo.
He explains that some clients choose to perform currency hedging in cases of inheritances and donations. Since the document gathering phase can take some time, some people opt to “lock in the exchange rate” at levels considered more advantageous to ensure higher receipts when the bureaucracy is concluded.
“The client can use hedging in NDF or futures exchange operations. This way, it is possible to lock in the exchange rate and have predictability of how much will be received at the end of the process,” explains Russo.
The expert states that there is no value limit for this type of transfer but warns of the need to prove financial capacity. “We have a team that follows the entire process of receiving international inheritances and donations and facilitates this type of transaction,” he says.
The Ouribank team is available through traditional contact channels and via email at atendimentob2b@ouribank.com.