Amid the legal battle over how to calculate the Inheritance and Gift Tax ( ITCMD ), with state tax authorities attempting to collect more, the Superior Court of Justice (STJ) made a binding decision in December 2025. But the debate, which should have been settled, continues.
The Court acknowledged that states can indeed reassess the value of assets when they believe the amount declared by the taxpayer is below market value. But not in the way they were doing it – and many continue with the same processes.
“We are already receiving several cases at the office that show non-compliance with the decision, and legal action is starting to pile up,” says Lucas Babo, a lawyer specializing in tax and estate planning at the Cescon Barrieu law firm.
The ruling on Case 1.371 was initially seen as a victory for state farms, allowing them to challenge the tax amount without needing express authorization from state law. However, the ruling also imposed a significant brake on how this tax collection had been carried out in practice.
The court did not approve the automatic replacement of the value declared by the taxpayer with a base value previously established in administrative tables or indexes.
However, the tax authorities can only recalculate the value if they initiate an individualized administrative process, with a technical report that concretely proves that the declared value is outside the market range - and guaranteeing the taxpayer the right to defend themselves.
"It is not possible to use ready-made tables, generic reference values, or any automatic criteria as a substitute for this individualized process, as a significant portion of farms have been doing and continue to do," says Babo.
Among the states, São Paulo stands out as the most emblematic example of the distortion pointed out by lawyers in the field. Although São Paulo law establishes the IPTU (Property Tax) market value as a reference for urban properties, the São Paulo Treasury has been using, in practice, the 'reference market value of ITBI (Real Estate Transfer Tax)' (created by decree and generally much higher than the IPTU) as an automatic minimum basis for ITCMD (Inheritance and Gift Tax).
The São Paulo Court of Justice has already rejected this practice in several rulings, understanding that altering the calculation basis by decree, without legal backing, is illegal. Even so, the electronic system of the São Paulo State Finance Department makes it difficult to declare values below this index, effectively forcing a higher basis.
Rio de Janeiro, on the other hand, adopts what it calls "multiplier indices," established by administrative decree, which are applied to the IPTU (property tax) value according to each municipality, regardless of any analysis of the specific property.
According to Babo's interpretation, this mechanism reproduces exactly the logic rejected by the STJ: "This constitutes exactly the type of generic tax agenda that the STJ prohibited," he states.
Other examples include Rio Grande do Norte and Minas Gerais, which also use standardized tables or assessments that, in practice, function as automatic guidelines, without the individualized evaluation required by the Superior Court of Justice (STJ).
For families, the advice now is to react whenever the ITCMD (Inheritance and Gift Tax) charge is based on automatic calculations, such as the ITBI (Property Transfer Tax) reference value, fixed multipliers, or any generic table applied without a concrete analysis of the property.
In practice, legal uncertainty persists, but the path to legal defense is now clearer.
"Unfortunately, the judicialization of the tax amount continues. But the courts are bound by the precedent of the Superior Court of Justice (STJ), which makes the outcome generally favorable to the taxpayer in these cases," says Babo.
