The 1st Panel of the Federal Supreme Court (STF) understood that the appreciation of real estate donated by a person to their descendants as an advance on their legitimate share should not be taxed by Income Tax.
In other words, in the understanding of the STF, the capital gain represented by the overvaluation of assets donated by a person to his/her heirs, as a way of anticipating what would be due in the event of succession, does not represent an increase in assets for the donor that could validly give rise to the incidence of IR.
This is merely a development of the thesis already established by the Supreme Federal Court (STF), which states that income tax can only be levied on the increase in assets that are economically or legally available. In the case of donations, there is no need to discuss any increase in assets for the donor.
Furthermore, according to the STF, allowing the requirement of IR in such a situation would represent a true bis in idem, insofar as such materiality (donation) constitutes a triggering event for ITCMD.
This decision is extremely important, as it will allow tax planning to be carried out when inserted into the context of succession structuring.
Added to this is the possibility that taxpayers who may have paid income tax on capital gains on donations as advances on legitimate income may be able to recover the amounts paid for this purpose, subject to the time limit for this purpose.
