Inheritance Tax in the World – Complete Chart

Have you ever thought that, after a person dies, the heirs to their estate will need to find documents, ask for certificates, and even pay taxes?

In Brazil, the inheritance tax is called ITCMD (Imposto de transmissão causa mortis e doação) but it’s not unique to our country.

Inheritance taxes are among the most common taxes around the world, although each country determines its own rules, amounts, exemption situations, and how they are going to be charged.

Knowing this, this article will bring a chart with the main countries where this tax exists and its percentage. We are also going to explain how the inheritance tax works in Brazil and the advantages in relation to other countries. Let’s check it out!

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Author: Lucas Gomes Furtado

How must the inheritance tax be paid in Brazil?

After the death of a person, their heirs must start the inventory of all property belonging to the deceased. In this moment, they also have to pay the ITCMD (Imposto de transmissão causa mortis e doação) tax.

This tax will be due whenever there is the transfer of goods (whether movable or immovable property), or the transfer of rights, from one person to another, in case of death or donation, and it is calculated on the market value of the property.

Therefore, because it is a state tax, ITCMD must be paid to the federative state where the inventory was started, and each Brazilian state has its own rules for payment.

This means that the tax percentage varies from state to state: in some, there is a flat rate, but in others, the percentage may change depending on the case, according to the value of the property and the degree of kinship.

In several states, the tax is progressive, which means that the higher the total value of the property, the higher the inheritance tax will be.

As an example, in states such as Paraná and São Paulo, the percentage always remains the same (4%), in spite of the number of goods, value of property, or degree of kinship to the deceased.

Other states

In other states, such as Santa Catarina, the amount due varies from 1% to 7%, if they are direct heirs to the deceased, or it will be a flat rate of 8%, if they are collateral heirs or if they are not related to the deceased.

It’s also important to remember that the maximum rate in the country is 8% and that the heirs may be exempt from paying ITCMD in some states, which usually happens when there is only one asset or low-income property.

However, since each federative state has its own specific laws, it is recommended that the heirs seek the specialized assistance of a lawyer in order to be informed correctly.

Why is Brazil the best place to have a family succession?

Although this is not something often talked about, Brazil can be considered a great place to start a family succession because there are several advantages in comparison to other countries.

As it was mentioned before, despite having a high tax burden overall, Brazil has relatively low rates in regard to its inheritance tax, also known as ITCMD.

In Brazilian reality, the law determines that the maximum rate for this tax is 8% of the market value of the property and no federative state can charge more than this limit.

Around the world, many countries on several continents have established much higher percentages of inheritance tax in relation to Brazil, which may catch unwary people off guard in such a delicate moment.

The chart below shows some examples of countries and the percentage that the inheritance tax may reach in their territories:

Country	Percentage
Belgium	80%
France	60%
Japan	55%
Germany	50%
South Korea	50%
Lebanon	45%
United States	40%
Netherlands	40%
United Kingdom	40%
Ecuador	37%
Tunisia	35%
Spain	34%
Ireland	33%
South Africa	25%
Chile	25%
Colombia	15%
Denmark	15%
Cameroon	10%
Iceland	10%
Lithuania	10%
Mozambique	10%
Portugal	10%
Thailand	10%

According to the data above, it’s clear that there are many advantages when it comes to transferring property to heirs in Brazil, compared to other countries around the world.

Aside from having a low maximum rate of ITCMD, there is also the possibility of having a private pension plan, which may be another benefit for whoever chooses to have their family succession in Brazil.

In our country, there are open and closed private pension plans. The first type of plan is usually made for company employees and specific professional categories. The second one, however, may be chosen by any person.

In other words, this type of pension works as an alternative to state pensions, as it allows the pension holder to guarantee their sustenance after retirement according to each case.

Also, after the death of the pension holder, the money left for the private pension is usually directly divided among the beneficiaries, the way it was determined by the pension holder while they were alive.

This means that, in most cases, the money associated with private pensions is not considered inheritance and should not be a part of the inventory proceeding. Also, there is no ITCMD due on this amount of money.

Therefore, in these situations, being a private pension holder in Brazil may be considered an advantage when it comes to future family succession.

It’s important to mention, however, that there may be exceptions to the rule depending on each place and situation, and that is why it is always valid to seek the specialized assistance of a lawyer.

Another possibility that may be favorable when it comes to inheritance tax payments is the creation of a holding company.

A holding company is nothing more than a type of company created to allow strategic planning in regard to the management of property and/or other companies by the company partners.

On that account, in this type of company, particular goods belonging to certain people are brought to the company and start belonging to this company while still being managed by the partners.

This planning strategy can be beneficial to whoever intends to have their family succession in Brazil because the taxation on holding companies is usually less heavy than on natural people.

Besides that, the creation of a holding company guarantees more safety and better management of the property, which can be divided in accordance with the person’s wishes after their death.

Furthermore, this type of planning is also helpful in that it prevents bureaucracy, long lines, and proceedings required for the transfer of property from a deceased person to be concluded.

Because of this, it is clear that, in comparison to other nations in the world, Brazilian legislation has created a number of advantages that may turn family succession into something easier for the people who wish to start it here.