International Gifts in 2026: ITCMD, Gift Tax and Reporting

International gifts are not free of tax or reporting. In Brazil, the ITCMD is a state tax, and when the donor lives abroad, the Constitution leaves jurisdiction to a complementary law. In the United States, gift tax reaches nonresidents when the property is real estate or tangible property located there. Each side has its own form and deadline.

Does the ITCMD apply to gifts when the donor or the assets are abroad?

The Constitution gives the states and the Federal District the power to levy the tax on transfers causa mortis and on gifts of any assets or rights (art. 155, I). Paragraph 1 of the same article says which state collects and how. Constitutional Amendment 132/2023 (Emenda Constitucional 132/2023) changed that paragraph, and the current text is worth reading directly on the Planalto website.

The key point for anyone with family or assets outside the country is item III: the power to levy the tax is regulated by complementary law if the donor is domiciled or resident abroad, or if the deceased owned assets, was a resident or was domiciled, or had the estate administered outside Brazil. In other words, the Constitution does not resolve the case on its own. Before planning, confirm with a tax attorney whether a complementary law is in force and how your state's law treats the situation. Rules, rates and exemptions vary by state, so check with the state Finance Department (Secretaria da Fazenda).

Which state has jurisdiction and how is the tax calculated?

Article 155, paragraph 1 of the Constitution organizes the rule as follows:

The text of EC 132/2023 repeats the new wording of items II and VI. The Constitution also provides that the tax does not apply to gifts and transfers to nonprofit institutions of public and social relevance, under the conditions of the complementary law (item VII). The effective rate in your case depends on state law, and no figure should be assumed without checking with the state's Finance Department.

Does a gift from parents to children advance the inheritance?

Yes, and it matters more than it seems. Article 544 of the Civil Code says that a gift from ascendants to descendants, or from one spouse to the other, counts as an advance on what they are entitled to by inheritance. Article 549 declares void the part of a gift that exceeds what the donor could have disposed of by will at the time of the gift. And article 1,846 reserves half of the estate to the forced heirs, known as the legítima.

In practice, moving assets abroad by gift does not escape these rules. A gift that infringes on the legítima can be challenged, whatever country the asset is in. For an overview of succession with assets outside Brazil, see the guide to international succession planning and the article on how an offshore company affects probate.

What if the gift goes through a trust abroad?

Law No. 14,754/2023 (Lei 14.754/2023) addresses the subject in article 10. For the purposes of the law, assets and rights placed in a trust abroad remain owned by the settlor after the trust is created and pass to the beneficiary at the time of distribution by the trust or at the settlor's death, whichever comes first. Paragraph 2 treats the change of ownership as a transfer without consideration from the settlor to the beneficiary: a gift, if it occurs during the settlor's lifetime, or a transfer causa mortis, if it results from death.

The transfer to the beneficiary may also be deemed to have occurred earlier if the settlor irrevocably gives up the right over part of the trust assets (paragraph 1). Reading the full text on the Planalto website is essential before structuring any trust. For a discussion of the structure itself, see offshore trust for Brazilians: is it worth it?.

Does the United States tax gifts?

According to the Form 709 instructions (2025 edition), the U.S. federal gift tax applies to any transfer by gift of real or personal property, tangible or intangible, made directly or indirectly. The rule changes for a nonresident who is not a citizen (NRNC): that person is subject to the tax on gifts of real estate or other tangible property located in the United States. In that case, the form is Form 709-NA.

The 2025 instructions state that the annual exclusion is US$19,000, and that the NRNC must file Form 709-NA when making gifts of future interests, or when gifts of present interests to donees other than the spouse add up to more than US$19,000. The amounts change each year, so confirm the ones for the year of the gift.

Interests in an LLC and other intangible assets require case-by-case analysis. The instructions refer to real estate or tangible property located in the U.S. for the NRNC, and the classification of an equity interest depends on the structure. For anyone with an LLC, the page on corporate structures presents the service.

Does Form 3520 apply to a Brazilian who receives a gift from abroad?

Only if the recipient is a "U.S. person" under the instructions. According to the Form 3520 instructions, the obligation reaches a U.S. person who, during the year, received more than US$100,000 from a nonresident alien individual or a foreign estate, treated as gifts or bequests (Part IV). Amounts received from related persons are added together for this threshold.

Anyone who fails to file is subject to the foreign gift penalty under section 6039F: 5% of the value of the gifts for each month of delay, up to a maximum of 25%. Someone who does not qualify as a U.S. person is not covered by this rule on that basis alone. Anyone with ties to the U.S., such as tax residence, needs to check the definition of U.S. person in the instructions before deciding.

When does the CBE (Brazilian Capital Abroad report) come into play in an international gift?

Resolution BCB No. 279/2022 (Resolução BCB nº 279/2022) requires the annual declaration of Brazilian capital abroad when it totals US$1,000,000.00 or more on the base date of December 31 (art. 10). If, after a gift, a Brazilian resident ends up holding assets outside the country above that amount, the obligation arises. The quarterly declaration only applies from US$100,000,000.00 (art. 11). The text is at Resolution BCB 279 and the guidance is on the CBE page.

How do you organize an international gift, step by step?

1. •Identify the donor, the donee and where each one is a tax resident.
2. •List the assets and the location of each: real estate, account, shares, LLC interest.
3. •Find the competent state and read the state ITCMD law; confirm whether an applicable complementary law exists.
4. •Check the legítima and the advance on inheritance, if the donee is a descendant.
5. •Review the obligations in the U.S., if the asset is there or if either party is a U.S. person.
6. •Keep the gift agreement, proof of value and date, statements and receipts for each payment.
7. •Check the CBE and the annual declaration for the following year.

For support on this front, see the tax planning page.