Technical article

Brazil: 15% a Year on Trust Income Even if I Never Withdraw?

Brazil's Law 14.754 of 2023 taxes trust income and gains at 15%, at the individual level, from 1 January 2024.

By Neil Solomon · 4 min read

Imagine a couple from Florida whose daughter is moving to São Paulo. They hold a family trust in the US, and the daughter is one of the beneficiaries. She has heard a number: 15% a year on trust income, even if she never takes a dollar out. Is that right?

The number is real. Who owes it, and when, is where the sources differ.

The law

Brazil's Law 14.754 of 2023 taxes trust income and gains at 15%, at the individual level, from 1 January 2024. EY (tier B, December 2023) says this is a separate regime from the ordinary income scale, whose top rate is 27.5% on monthly income above BRL 4,664.68 (about US$850), according to PwC (tier B, 2026). Brazilian residents are taxed on worldwide income. A permanent visa holder is resident from entry. A temporary visa holder with no Brazilian work contract becomes resident after 183 days in 12 months.

Who owes the 15%

EY reads the law this way. Trust assets are treated as the settlor's property until there is a distribution, the settlor's death, or an irrevocable abdication of rights. The holder lists the assets in the tax return at acquisition cost. A change of ownership during the settlor's life counts as a donation, and on death it counts as an inheritance.

A blog from an investment adviser (tier U) reads it a second way. It says a Brazilian beneficiary of a trust set up by a foreigner pays 15% each year on the trust's income, even if none of it is paid out. It adds that principal returned to the beneficiary is not income, though it may attract the state inheritance and gift tax.

The two readings differ on a point that matters to the daughter. Under EY's reading, the trust is the settlor's until a payout, and the settlor is not the one in Brazil. Under the blog's reading, the daughter owes the tax each year. Neither source is a Brazilian tax office.

The state inheritance and gift tax

Brazil's tax on gifts and inheritances is set by each state and is capped at 8% (PwC, tier B). The blog gives São Paulo 4%, Minas Gerais 5% and Rio de Janeiro up to 8%. A 2026 law-firm note (tier C) says new rules require progressive rates and say which state collects when people or assets sit in more than one place. Real estate follows the state where it sits. Movable assets follow the state where the person who died lived. If that person lived abroad, the state of the heir's residence applies. If everyone is abroad, it is the state where the Brazilian assets are. Assets held abroad are still debated.

Reporting

A resident with assets abroad of US$1 million or more at 31 December files a yearly declaration with Brazil's central bank, between 15 February and 5 April. The declaration becomes quarterly at US$100 million. The penalty runs up to BRL 250,000 (about US$45,000). Account data from other countries also reaches the Brazilian tax office, according to the blog.

Two readings side by side

What this touches

The daughter carries the tax return. The couple carry the way the trust is written. A son who stays in Florida is not touched. The trustee may be asked for a yearly statement of income by type.

You might say: "Which of the two do I follow?" The two sources disagree, and a Brazilian tax adviser reading the law itself could settle it. In the meantime the daughter could keep the trust's yearly statements, so either reading can be applied afterwards.

You could ask the adviser what happens in the first year of residence, and which state would collect on an inheritance.

Has a rule ever looked different to two advisers you consulted? Share it here. Someone else may be at that fork.

Figures are estimates for planning, based on public data. Date read: October 2026.