STF begins to judge the incidence of ITCMD on PGBL and VGBL with the death of the plan holder

The STF (Supreme Federal Court) began the trial of Theme 1214 under the general repercussion system, which concerns the possibility or not of levying ITCMD (Tax on Transmission Causa Mortis and Donations) on PGBL (Free Benefit Generating Plan) and VGBL (Free Benefit Generating Life).

The discussion is complex and may have a major impact on succession planning that uses the aforementioned plans, since an important part of using the VGBL and PGBL is the fact that they are not taken into consideration for the purpose of determining the inheritance estate, and, consequently, for calculating and paying ITCMD.

The judgment will take into account the interpretation provided by the STJ (Superior Court of Justice) regarding the aforementioned insurance instruments, according to which the PGBL corresponds to an open supplementary pension plan with survivorship coverage, and that the VGBL represents an insurance plan with survivorship coverage, as defined by SUSEP (Superintendence of Private Insurance). However, during the period of asset formation (of making contributions, so to speak), the Superior Court understood that the predominant nature of the open supplementary pension contract is an investment, which is why the value existing in an open supplementary pension plan, before its conversion into income and pension to the holder, has an investment nature.

Still regarding the VGBL, regarding the existence of a survivorship insurance clause, the Supreme Federal Court (STF) will decide whether or not this constitutes life insurance, which would be paid upon the insured’s death. More specifically, the argument in favor of levying ITCMD is that survivorship insurance is not intended for heirs or beneficiaries, but rather for the insured themselves, so that their death will convert the amount received into assets to be divided among their heirs.