The new component that is calling the shots in family offices.

Changes in the taxation of investments and dividends brought about by the tax reform are causing a profound transformation in the operations of Brazilian family offices.

While asset selection used to be the starting point of an investment strategy, it has now become one of the final steps in a process that begins with a detailed analysis of each client's tax situation.

The main consequence is the elimination of standardized solutions for high-net-worth investors, leading firms to offer three, four, or more different investment structures so that clients can try to reduce the " tax bite ".

"The wealth planning aspect has become the main part of the conversation with wealth management clients, more so than portfolio construction," says Thiago Picanço, partner and head of wealth management at Reach Capital.

"The difference between doing business with a more efficient tax strategy in mind versus not thinking about it ends up costing a few performance points per year, regardless of the risk taken," he adds.

The firm — which serves clients with a minimum ticket size of R$10 million and manages approximately R$1.7 billion in its wealth management arm — realized it would have to expand the number of portfolio models to accommodate different tax profiles, in addition to the traditional risk levels, offsetting changes in the tax code.

Instead of offering five types of portfolios that only took into account the level of risk and return on investment, Reach began to also consider six different tax profiles — Brazilians with offshore investments , without offshore investments, non-residents, and others.

The result was the creation of 30 investment portfolios tailored to different tax profiles and financial return objectives.

"Nowadays, you need to be much smarter about what you're doing in terms of taxes. This has forced family offices to become more sophisticated," says Picanço.

This increase in the number of strategies represents a significant change from what family offices did a few years ago, making the activity more complex.

Until then, wealth planning carried out by family offices was relatively simple, supported by three structures: offshore companies, exempt from income tax; exclusive funds in Brazil, whose taxation occurred only at the time of redemption of the resources; and asset holding companies, used to concentrate real estate or corporate holdings.

Tax reform began to tighten the net around these structures. In 2023, the government enacted the law that regulated the taxation of offshore companies and investment funds abroad. In the same year, this tax was extended to exclusive funds. In 2026, taxation on dividends came into effect, with a 10% withholding tax on monthly distributions exceeding R$ 50,000.

It's important to remember that the change goes beyond the monthly withholding. The same law established the Minimum Personal Income Tax (IRPFM), which is levied annually on the total income — including income that is currently exempt — of those who earn between R$ 600,000 and R$ 1.2 million per year, with a progressive rate of up to 10%.

In practice, this closes the loophole for diluting receipts among several paying companies to circumvent the monthly limit of R$ 50,000, since the tax authorities will once again look at the complete picture in the annual adjustment.

This change also explains part of the urgency observed since the end of 2025. Profits accrued up to December 31 of that year only remain exempt if the distribution has been formally approved by the competent corporate body by that date - even if the actual payment to shareholders occurs in installments until 2028.

Many family offices rushed to protect, with registered minutes, the stock of profits accumulated before the new rule came into effect.

"People need to realize that it's really over. Everyone is going to pay something," says Sharon Halpern, partner and private banker at Blackbird , a firm that manages R$2.5 billion in assets and serves private clients with assets starting at R$5 million. "We need to mix up the strategies a bit."

Currently, Blackbird has not undertaken a widespread portfolio overhaul. Halpern says that adaptation is being done gradually, as new resources enter the portfolios or investments reach maturity. According to her, the strategies depend on how much the client receives, how they receive it, and the origin of those resources.

"Since many people already have allocated portfolios, it's not that we're going to do a 180º turnaround in the portfolios. We're going to start doing it from now on. If someone makes a new contribution, that contribution will already be analyzed within the new rules," she says.

According to Henrique Galvão, head of legal advisory and wealth planning at Vêneto Family Office , a firm with R$ 6.5 billion under management and serving clients with a minimum ticket size of R$ 20 million, there is no "magic solution".

Strategies depend on how much the client receives, how they receive it, and the source of the funds, which makes it impossible to even define a fixed number of strategies or portfolios.

"There is perhaps a menu of solutions. For a given family, the solution will be a mix of several of these strategies; for some, one strategy works, and for others, it is necessary to use them all," says Galvão.

Family offices undergoing transformation.

This scenario tends to further reinforce the transformation of family offices into complete wealth managers, responsible for coordinating not only investments, but also the entire financial, corporate, and succession strategy of business families.

In addition to expanding the possibilities for structuring portfolios, Galvão says that Veneto has been evaluating other alternatives, such as corporate reorganizations and holding companies, always considering the company's cash flow, the future need for dividend distribution, and the shareholders' equity objectives.

Picanço, from Reach, points out that tax efficiency can add between 1% and 2% to the annual return on investment simply through proper planning.

"It's possible to significantly reduce the tax burden, at least 60% to 70%, with good planning. But to do that, you have to invest it in various types of vehicles," he says.

This calculation changes depending on the structure. For companies under the actual profit regime, with a corporate tax burden already close to the 34% ceiling, a credit mechanism created by the law itself tends to offset a good portion of the new tax on individuals.

However, for holding companies and companies operating under the presumed profit regime—a common model among family offices—with a low tax burden on the legal entity, the additional tax of up to 10% falls almost entirely on the partner, significantly increasing the total tax bite.

While highlighting that combining strategies can help reduce the impact of taxes, Halpern warns that caution is needed with structures presented as universal solutions for reducing taxes. She states that many investors are making hasty decisions without evaluating all the tax impacts.

"I think a lot of people are doing outlandish things, and in the end, that can be worse than simply paying the tax," he says. "The planner needs to understand taxation much better and make those connections."

Experts also point out that strategies will continue to be influenced by the regulatory environment, which is likely to remain in flux. The main concern today is the potential taxation of currently exempt assets, in addition to discussions about increasing the ITCMD ( Inheritance and Gift Tax) in states such as São Paulo and Minas Gerais.

"I think that tax exemption isn't even an 'if'. I think it's a 'when'. We have a very high level of debt in Brazil. The government will need new sources of revenue," says Paulo Ribeiro, head of relationship and portfolio strategy at Vêneto.