Succession planning is one of the most important decisions for families that own businesses, real estate or significant assets in Brazil.

Without proper planning, the transfer of assets after the death of a family member may involve probate proceedings, taxes, disagreements between heirs and difficulties managing the assets during the transition.

One strategy commonly used in Brazil is the creation of a family holding company.

A family holding can centralize assets and ownership interests, establish governance rules and allow the transfer of company shares to the next generation during the owner’s lifetime.

However, creating a holding company does not automatically eliminate inheritance taxes, ITBI or income tax.

The structure needs to be analyzed carefully because Brazilian rules concerning ITCMD, ITBI, valuation of company shares and asset contributions have changed significantly in recent years.

This guide explains how succession planning through a family holding works in Brazil and which tax and accounting issues should be evaluated before implementing the structure.

What is a family holding company?

A family holding is a legal entity created to centralize assets or ownership interests belonging to members of the same family.

The company may hold assets such as:

• real estate;

• shares in operating companies;

• financial interests;

• investments;

• other assets and rights.

Instead of family members owning these assets individually, the holding becomes the owner and family members hold shares or quotas in the company.

This can simplify governance because decisions regarding the assets are made according to the company’s articles of association, shareholder agreements and other corporate rules.

A holding can therefore be used as part of a broader Corporate Planning strategy.

Is every holding company the same?

No.

The word “holding” describes the function of the company, not a single legal structure.

A pure holding primarily owns interests in other companies.

A mixed holding may own company interests and also conduct other business activities.

A family or patrimonial holding is commonly used to concentrate family assets, such as real estate and ownership interests, with a focus on governance and succession.

The appropriate model depends on the family’s assets, objectives, number of heirs, business activities and tax situation.

This is why succession planning should begin with a diagnosis of the existing patrimony rather than simply opening a new company.

How does succession planning through a holding work?

A simplified family holding structure may follow several steps.

First, family members create the company and define its corporate rules.

Next, selected assets may be transferred to the holding as capital contributions or through other legally appropriate transactions.

The original owners then hold shares or quotas representing their interest in the company.

As part of the succession plan, some or all of these shares may later be donated to heirs.

The donors may also retain certain rights, depending on the structure adopted, such as usufruct or management powers.

This changes the focus of succession.

Instead of transferring each house, apartment or business interest individually, the succession can involve the ownership of the holding company’s shares.

However, every stage may create tax consequences.

What assets can be transferred to a family holding?

Depending on the structure and legal analysis, a holding may own assets such as:

• houses and apartments;

• commercial properties;

• land;

• shares or quotas of other companies;

• vehicles;

• financial investments;

• trademarks or other rights.

Real estate is particularly common in family holding structures.

But transferring real estate into a company requires careful analysis because the transaction may involve ITBI and potentially income tax on capital gains.

The objective should not be to move every asset into the company automatically.

Some assets may be more efficient to maintain directly under individual ownership.

Can assets be contributed to a holding at their historical value?

Brazilian tax legislation allows individuals to transfer assets and rights to a legal entity as a capital contribution using either the value reported in the individual’s tax return or the market value.

Article 23 of Law No. 9,249/1995 establishes this possibility. See Law No. 9,249/1995.

If the individual contributes an asset at the same value reported in their tax return, there may be no immediate capital gain from the difference in value.

If the asset is transferred at a higher value, however, the positive difference may be treated as a capital gain and become subject to income tax.

This means that transferring an appreciated property to a holding should be modeled before the transaction.

A property purchased decades ago may have a tax basis significantly below its current market value.

Choosing the contribution value can therefore affect both the company’s balance sheet and the individual’s tax exposure.

For this type of analysis, professional Tax Consultancy is particularly important.

Does transferring real estate to a holding generate ITBI?

Possibly.

ITBI is a municipal tax on certain transfers of real estate.

The Brazilian Constitution provides an immunity for certain transfers of property made to a legal entity as part of the realization of subscribed capital.

But this immunity is not unlimited.

In Theme 796, the Brazilian Supreme Court established that the ITBI immunity does not cover the portion of the property’s value that exceeds the amount of capital actually being contributed.

The official STF precedent states that the immunity applies only up to the limit of the social capital being integralized. See STF Theme 796.

Example

Imagine that a property is valued at R$2 million.

The shareholder contributes only R$1.5 million of that amount to the company’s capital.

Under the rule established by the Supreme Court, the ITBI immunity does not automatically extend to the R$500,000 amount exceeding the capital contribution.

This is why the corporate documents and valuation used in the transaction matter.

What about real estate holding companies?

This is currently one of the most important legal discussions involving patrimonial holdings.

The Brazilian Supreme Court is analyzing Theme 1,348, which concerns whether the ITBI immunity for capital contributions also applies when the company receiving the property has predominantly real estate activities, such as buying, selling or renting real estate.

The issue is especially relevant to family and patrimonial holdings because many of these companies exist primarily to hold or rent real estate.

The STF’s official case page explains that the Court is deciding whether the constitutional ITBI immunity applies when the company’s predominant activity is real estate. Follow STF Theme 1,348.

Because the case remains relevant to current planning, companies should verify the most recent STF position before contributing real estate to a holding.

A succession structure should not be designed based on the assumption that ITBI immunity is guaranteed in every real estate holding scenario.

How are shares transferred to heirs?

Once the holding is established, succession planning commonly involves transferring company shares or quotas to the next generation.

Instead of waiting until the owner’s death, shares can be donated during the owner’s lifetime.

The donation may include governance provisions designed to preserve control and organize the relationship between heirs.

Depending on the family’s objectives, corporate documents may address matters such as:

• voting rights;

• company administration;

• restrictions on selling shares;

• rights of first refusal;

• entry of spouses;

• transfer rules;

• dividend policies;

• dispute resolution.

These rules can be as important as the tax structure itself.

A good succession plan is not only about transferring ownership.

It is also about defining who controls, who manages and how decisions will be made.

Can parents donate shares and retain usufruct?

Yes, usufruct is commonly used in Brazilian succession planning.

In a donation with reserved usufruct, ownership can be transferred to the heirs while the donor retains certain economic or usage rights.

In holding structures, this may allow parents to transfer the bare ownership of shares while retaining rights defined in the corporate and succession arrangement.

The exact effects depend on how the donation and corporate documents are drafted.

The São Paulo State Tax Authority, for example, provides specific guidance regarding donations with reserved usufruct and how ITCMD may be paid. See SEFAZ-SP guidance on donations with usufruct.

In São Paulo, the taxpayer may in certain situations pay ITCMD on the full value at the moment of donation or pay on the bare ownership and defer a portion associated with the usufruct until ownership is consolidated.

Rules differ by state, so the local legislation must always be checked.

Does donating holding shares trigger ITCMD?

Yes.

The donation of company shares or quotas is generally subject to ITCMD, the Brazilian state tax on inheritance and donations.

The tax is administered by the states and the Federal District.

The constitutional framework changed with Constitutional Amendment No. 132/2023.

The Constitution now establishes that ITCMD must be progressive according to the value of the inheritance share, legacy or donation. See Constitutional Amendment No. 132/2023.

Complementary Law No. 227/2026 subsequently created national general rules for ITCMD. See Complementary Law No. 227/2026.

However, actual rates and brackets remain defined by each state or the Federal District within the applicable constitutional framework.

Therefore, the amount of ITCMD must be analyzed according to the jurisdiction applicable to the donation or inheritance.

How are holding company shares valued for ITCMD?

This is one of the most important changes for family holdings.

Under Complementary Law No. 227/2026, when shares are not traded on an organized securities market, their ITCMD value must be calculated using an appropriate technical methodology.

The law establishes that the amount cannot be lower than the company’s equity adjusted to the market value of its assets and liabilities, plus the market value of goodwill, according to the legislation of the relevant taxing state.

This means that families should not assume that the ITCMD base will simply be the nominal value of the company’s shares.

For example, a holding may have capital of R$1 million but own real estate worth R$10 million.

Using the company’s nominal capital alone may not represent the value accepted for ITCMD purposes.

São Paulo’s tax authority has already reinforced this approach in a 2026 ruling concerning donations of shares in privately held companies.

The ruling states that the value attributed to company shares should reflect their market value, and that book value may only be accepted when it corresponds to the real economic value of the equity. See SEFAZ-SP Consultation Response 33,625/2026.

This makes professional valuation increasingly important in succession planning.

Does Brazil now have progressive ITCMD?

The Constitution requires ITCMD to be progressive.

Complementary Law No. 227/2026 also establishes progressivity as a general rule.

However, the practical rates still depend on state legislation.

For example, São Paulo’s current ITCMD law still establishes a 4% rate. See São Paulo Law No. 10,705/2000.

Therefore, articles about succession planning should avoid stating that a single national ITCMD rate applies throughout Brazil.

The correct approach is to evaluate the legislation of the state with taxing jurisdiction at the time the succession or donation plan is implemented.

Can splitting donations reduce ITCMD?

This requires much more caution today.

Complementary Law No. 227/2026 establishes that successive donations between the same donor and recipient can be aggregated during the period established by state or district legislation.

The tax may then need to be recalculated using the total donated amount and the applicable progressive rates.

Therefore, simply splitting one large donation into several smaller donations does not necessarily guarantee lower ITCMD.

Succession plans should consider the entire sequence of donations, not only each transaction individually.

Does a family holding always reduce inheritance taxes?

No.

A holding can improve succession organization without necessarily reducing the total tax burden.

Its benefits may include:

• centralized ownership;

• governance rules;

• earlier succession planning;

• reduced operational complexity during succession;

• easier management of family assets;

• continuity of business decisions.

Tax savings may occur in specific situations, but they depend on factors such as:

• asset values;

• state ITCMD rules;

• contribution values;

• ITBI treatment;

• income tax exposure;

• company tax regime;

• future rental or asset sale income.

A structure should therefore be evaluated by comparing scenarios.

Sometimes maintaining assets under individual ownership may be more efficient.

Sometimes the holding provides significant governance and succession advantages.

The answer depends on the family’s actual situation.

Does a holding eliminate probate?

Not necessarily.

A properly structured holding can reduce the number of individual assets that need to be dealt with directly during succession because the heirs may already own shares in the company.

However, whether probate proceedings are completely avoided depends on what assets remain in the deceased person’s estate and how the succession plan was implemented.

It is safer to say that a holding can simplify succession, rather than guarantee that probate will never be required.

Can a holding protect assets?

A family holding can help organize ownership and separate personal and business structures.

However, it should not be marketed as an automatic shield against creditors, tax authorities or legal claims.

Corporate structures may be challenged when they involve fraud, sham transactions, abuse of legal personality or transfers designed to prejudice creditors.

The objective should be asset organization and governance, not hiding assets or avoiding legitimate obligations.

What tax regime should a family holding use?

The appropriate tax regime depends on the company’s activities and income.

A holding receiving rental income from real estate, for example, may have a different tax profile from a holding whose primary purpose is simply to own shares in operating companies.

The analysis may involve:

• corporate income tax;

• CSLL;

• PIS and Cofins under the applicable regime;

• taxation of rental income;

• capital gains from selling assets;

• accounting treatment of investments.

The best structure depends on projected revenue and future transactions.

CLM Controller’s Tax Consultancy can help model different tax scenarios before the holding begins operating.

Why accounting is important for a family holding

A holding may appear simple because it often has fewer daily transactions than an operating company.

But accurate accounting remains essential.

The accounting records should reflect:

• assets contributed to the company;

• capital contributions;

• ownership percentages;

• investments in other companies;

• rental income;

• expenses;

• distributions to shareholders;

• asset sales;

• changes in equity.

These records can also become important during valuation of company shares, tax audits and succession events.

CLM Controller’s Accounting Outsourcing helps companies maintain reliable accounting records, financial statements and management information.

Governance may be more important than tax savings

Many succession problems are not tax problems.

They are governance problems.

Parents may worry about whether heirs are prepared to manage the family business.

Siblings may have different objectives.

One heir may want to sell assets while another wants to retain them.

Spouses and future generations may also enter the ownership structure.

The family holding allows many of these issues to be discussed before a succession event occurs.

Corporate documents can establish rules regarding:

• management;

• voting;

• sale of shares;

• admission of new shareholders;

• distributions;

• succession;

• dispute resolution.

This is often the real strategic value of the holding.

When might a family holding not make sense?

A holding is not automatically appropriate for every family.

The structure may not be efficient when:

• the patrimony is relatively small;

• the family owns only one or two simple assets;

• implementation taxes are high;

• accounting and compliance costs exceed the benefits;

• there is no governance complexity;

• the family has no clear succession objectives.

Creating a company also creates recurring obligations.

There may be accounting, tax, corporate and administrative costs every year.

The expected benefits should therefore justify the additional structure.

Common mistakes when creating a family holding

Creating the holding only to “pay less tax”

Tax savings should be tested, not assumed.

Transferring real estate without analyzing ITBI

The constitutional immunity has limits and the treatment of real estate businesses remains an important STF issue.

Ignoring capital gains

Contributing property at market value can create taxable gain for the individual.

Using nominal share value for ITCMD without analysis

Current rules increasingly require valuation that reflects real economic value.

Donating shares without governance rules

A succession plan that transfers ownership but creates family conflict has not solved the main problem.

Forgetting recurring accounting obligations

The holding remains a legal entity and must maintain proper accounting and tax records.

How CLM Controller supports succession and holding structures

Succession planning through a family holding requires coordination between corporate, accounting, tax and legal decisions.

CLM Controller can support the accounting and tax aspects of these structures through:

• Corporate Planning

• Tax Consultancy

• Accounting Outsourcing

• Tax Outsourcing

The objective is to evaluate the structure before assets are transferred and identify potential tax and accounting impacts involving ITCMD, ITBI, capital gains and ongoing company operations.

Legal aspects involving donations, inheritance rights, corporate agreements and family governance should also be coordinated with qualified legal professionals.

Planning the succession of family assets or businesses in Brazil? Talk to CLM Controller and evaluate the accounting, tax and corporate impacts before implementing a family holding structure.

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Frequently Asked Questions

What is a family holding company?

A family holding is a company used to centralize assets or company interests belonging to members of the same family.

It can support governance, asset organization and succession planning.

Is a family holding legal in Brazil?

Yes.

Family and patrimonial holding companies are legitimate corporate structures when properly created and operated according to Brazilian corporate, accounting and tax rules.

Does a family holding avoid inheritance tax?

No.

Donations and inheritance of holding company shares may still be subject to ITCMD.

A holding can simplify the succession structure, but it does not automatically eliminate inheritance taxes.

What tax applies when shares are donated to children?

The donation of company shares or quotas is generally subject to ITCMD.

Rates and procedures depend on the state with taxing jurisdiction.

How are holding shares valued for ITCMD?

Under Complementary Law No. 227/2026, privately held shares must generally be valued using a technically appropriate methodology.

The minimum value should consider equity adjusted to market value plus the market value of goodwill, according to the applicable state legislation.

Can parents retain control after donating shares?

Succession structures can be designed so donors retain certain rights, including management rights or usufruct, depending on the legal and corporate arrangements adopted.

The structure should be documented carefully.

Does transferring property to a holding generate ITBI?

It depends.

The Brazilian Constitution provides ITBI immunity for certain capital contributions, but the immunity has limitations.

STF Theme 796 establishes that the immunity does not cover property value exceeding the amount actually contributed to capital.

The STF is also reviewing the treatment applicable to companies whose predominant activities involve real estate under Theme 1,348.

Can transferring an asset to a holding generate income tax?

Yes.

Brazilian individuals may contribute assets using the value reported in their tax return or market value.

If the transfer occurs at a higher value, the positive difference may be treated as a capital gain.

What is usufruct in succession planning?

Usufruct allows one person to retain certain economic or usage rights over an asset even after ownership or bare ownership has been transferred to another person.

It is commonly used in family succession structures.

Does a holding protect assets from creditors?

Not automatically.

A holding can organize assets and separate ownership structures, but it does not make assets immune from valid creditor claims, tax enforcement or court decisions.

Is a family holding worth it?

It depends on the size and type of assets, number of heirs, governance objectives, tax consequences and recurring compliance costs.

The structure should be evaluated through a comparison of different succession scenarios before implementation.