The new chess game of dividends: family offices recalculate their course in light of the 10% minimum tax.

Business families are now filing their 2025 income tax returns with a touch of nostalgia. Next year, with the dividend law, monthly distributions exceeding R$ 50,000 will be subject to a 10% withholding tax. And, to achieve maximum tax efficiency, wealth managers are doing the math and creating their own calculators to analyze each case individually.

NeoFeed spoke with wealth managers to understand what families have been doing in these first few months since the dividend law came into effect. In most cases, they are still in the calculation, simulation, and planning phase. But now, with the 2025 profit calculated and the income tax being prepared, this discussion is starting to gain momentum.

The point is that a large portion of major family businesses managed to distribute dividends tax-free last year, creating a liquidity cushion to get through the first half of the year and gain time to devise a strategy.

“The profit distributed up to December was so large that there’s a cushion being used in these first months of the year, allowing us to use this time for planning,” says Roberto Freitas, head of wealth planning at G5 Partners. “But I have no doubt that, in the second half of the year, these conversations will intensify and move from planning to action.”

There are still families where the fat accumulation is so great that redistribution may occur within the transition period, up until 2028. This also indicates that the government may take longer to feel the full impact of the change.

“Those who haven’t distributed the funds yet, but have the necessary documentation to do so, have until 2028 to do so tax-free. So, some families who didn’t have the cash are now evaluating whether a three-year payment plan makes sense, or if it’s better to take on debt now and distribute the funds,” says Octavio Arruda, director of wealth services at Andbank.

But, in any case, those who will need liquidity now or later are doing the math with their financial planners. TAG Investimentos, a multi-family office with approximately R$17 billion under management, already has its calculator and has been advising clients on the most efficient way to distribute dividends.

At NeoFeed 's request, the firm ran simulations to try and draw broader conclusions. The first of these answers a question that has been on the minds of business families: is it financially more advantageous to leave all dividends until the end of the year, avoiding early withholding?

Under the new rule, if the withholding occurs at the beginning of the year and there is a refund, the money will only be returned in the annual income tax adjustment of the following year, in May or June.

TAG simulated three paths for a majority shareholder of a company operating under the "real profit" regime with R$ 3 million in dividends already available to receive in 2026: distribute R$ 250,000 per month, concentrate everything in December, or adopt a hybrid strategy, with R$ 50,000 monthly from January to November and the balance at the end of the year.

The calculations show that concentrating everything in December, which seemed like the natural way to avoid early withholding, is the worst of the three scenarios. In the simulation, the entrepreneur's final position is R$ 2.994 million. The monthly distribution ends at R$ 3.015 million. The hybrid strategy reaches R$ 3.057 million.

This happens because not distributing [profit] also means leaving money within the company, where the taxation of financial income tends to be less efficient than for individuals.

In the simulation, TAG considered a tax rate of up to 34% for legal entities and 15% for individuals, which generated a net return after taxes of 12.68% per year for individuals and 9.38% per year for legal entities.

Furthermore, taking advantage of the monthly limit of R$ 50,000 without withholding has an effect. In the hybrid model, the tax drops from R$ 300,000 to R$ 245,000, a saving of R$ 55,000. But TAG itself emphasizes that this conclusion cannot be transformed into a general rule. With the same parameters, if the annual distribution increases from R$ 3 million to R$ 10 million, the answer changes and the distribution in December becomes more advantageous.

“Everything has to be weighed: the amount the entrepreneur will distribute, what they will leave in the company's cash flow to generate returns, and also the rates of return. In real life, this changes over time for each case,” says Manoela Vargas, head of wealth planning at TAG Investimentos.

According to her, the central point is that leaving money in the company also has a cost. “It’s not just a discussion about interest rates. It’s the difference in taxation between an individual and a legal entity. Keeping the money in the company might make sense, but it’s necessary to understand that there’s a penalty for that cash flow,” says Manoela.

Between the ideal and what is feasible.

But family businesses aren't always able to do what's most efficient for individuals. There's the company's cash flow need, the seasonality of the business, the company's investments, and the family's own liquidity. Therefore, the decision regarding dividends is becoming increasingly intertwined with the company's financial planning.

According to Pedro Olmo, partner responsible for the asset management area at Sten Multi Family Office, it is the company's cash flow that will ultimately determine how much can be distributed.

“If the company has the resources to do what would be ideal for the individual, perfect. But if there are cash flow issues or seasonality, the company's needs ultimately take precedence,” he says.

In Olmo's view, financial arbitrage needs to be weighed against the reality of the company and the family. "I think we'll have to look at each case individually: what are the cash needs of that company, what are the liquidity needs of the family, and what is the risk of accumulating cash in the business entity. There's no longer a one-size-fits-all solution," he says.

This change also alters the routine of those who advise these families. The dividend decision ceases to be an isolated conversation between partners and accountant and begins to involve the family office, the company's CFO, lawyers, and those responsible for the individual's financial portfolio.

According to Freitas, from G5, the new rule brings together two worlds that, until now, were treated more separately. “This new system makes personal and business finances more synergistic. It's necessary to plan throughout the year how expenses will be met. And this changes the investment portfolio. The planning of business families has changed,” he says.

Amanda Tavares, a partner in the wealth planning area at WHG, states that the decision cannot focus solely on the upfront tax. In a scenario of still high interest rates, it may make sense to distribute, even above R$ 50,000 per month, if the net proceeds can be efficiently reinvested in the individual's name.

“Families shouldn’t just consider the tax that will be paid in advance. The opportunity cost of that money can be high,” says Amanda. “With the interest rates we have today, you can’t miss the opportunity to receive those dividends and allocate them to generate income from that capital for fear of taxation.”

In practice, this means that postponing distribution may make sense from a tax perspective, but it raises another question: where will the money come from to cover the family's expenses throughout the year? If the answer is to redeem investments, sell assets, or change the liquidity portfolio, this decision also needs to be factored in.

“In fact, improvisation will be very costly. And if this is to be funded by rescuing investments, it has to be done with planning,” says Freitas, from G5.

Do wallets change?

Another major point of discussion regarding the 10% minimum tax rate is in asset allocations. Since the approval of the new rule, a question has gained traction among high-net-worth investors: would tax-exempt products, such as LCI, LCA, CRI, CRA, and incentivized debentures, lose attractiveness?

Not always. But the gross-up calculation, which equates tax-exempt and taxable rates, has changed. Before the law, it was enough to compare the term, rate, and applicable tax rate. Now, for the business investor, the effect of the minimum 10% tax on the portfolio also comes into play.

Previously, considering a 15% tax rate, a CDB (Certificate of Deposit) had to yield approximately 106% of the CDI (Interbank Deposit Certificate) to be equivalent to an LCI (Real Estate Credit Bill) or LCA (Agricultural Credit Bill) yielding 90% of the CDI. In TAG's simulation, for a businesswoman with an annual income above R$ 1.2 million, R$ 5 million in dividends from a company operating under the real profit regime, and R$ 2 million invested, a CDB at 100% of the CDI already matches an LCA at 90% of the CDI.

If the invested assets increase to R$ 20 million, maintaining the same assumptions, there is also a tie: R$ 7.155 million in both scenarios. The simulation shows that, in this specific segment, the equivalence between LCA at 90% of CDI and CDB at 100% of CDI is maintained.

However, TAG emphasizes that this is not a new fixed gross-up rule. The result may change depending on the company's effective tax rate, possible deductions, dividend volume, investment term, and redemption date.

“Previously, the calculation was much simpler: term, rate, and tax rate. From now on, the client's context becomes crucial,” says Manoela from TAG. “It's necessary to understand how much dividends they have to distribute, what the company's cash flow predictability is, what the effective corporate tax rate is, and when that investment will be redeemed.”

The firm emphasizes that the conclusion applies to this specific scenario of a company with actual profit, a 34% tax rate, and no deductions, and that if these assumptions change, the calculation changes.

But for now, tax-exempt products remain competitive in many market offerings, which explains why the review has been more about monitoring than a drastic portfolio change.

“What we have observed is more monitoring than a portfolio change going forward,” says Manoela. “The tax-exempt products still have value. It’s not a decision to switch from one product to another without considering the context.”

According to Arruda, from Andbank, for business families with a large volume of dividends, the calculation has definitely changed. “For business owners with significant dividend income, tax-exempt assets lose some relevance. In the annual adjustment, when everything is consolidated, the tax-exempt asset does not contribute to tax compensation. It doesn't help in that calculation,” he states.

The fact is that investment products are no longer analyzed in isolation. For business families, the comparison between a tax-exempt asset and a taxable one now also depends on the volume of dividends, the tax already withheld, the company's tax rate, and the expected cash flow throughout the year.

In this new arrangement, the advantage tends to lie less in choosing a single role and more in the ability to see the complete picture. Those who only focus on the portfolio may miss information about the company. Those who only look at the company may leave money on the table in their personal finances.

“This new system makes personal and business cash flow more synergistic. It’s necessary to plan throughout the year how expenses will be covered. And this changes the investment portfolio. The planning of business families has changed,” says Freitas, from G5.