The purchase of inheritance parts within the family is a common practice in Portugal, especially in the case of properties shared among several heirs. What many were unaware of is that, so far, these transactions could imply the payment of value taxes, even if the property was not sold in the market.
The tax authority considered that the alienation of a hereditary share, that is, the part of a property of inheritance, constituted a costly transmission subject to IRS. Thus, if one of the brothers bought the remaining part, everyone involved could have to pay tax.
However, the Supreme Administrative Court (STA) has just put a brake on this interpretation. According to a recent judgment, the sale of hereditary shares between heirs should not be considered as a property sales for the purposes of added value, and therefore cannot be taxed as such.
What is at stake
This type of situation is usual in families receiving properties by inheritance. When there are several heirs and only one decides to keep the property, it is often that it buy the remaining quotas by paying the so -called tornas.
So far, the Tax Authority interpreted this transaction as a sale, that is, a sale with potential profit, subject to IRS on added value. This understanding was now considered illegal.
According to the STA judgment, quoted by Jornal de Negócios, the sale of a quota part of an inherited well is not a sale of ownership under the terms of the fiscal law. Thus, it cannot give rise to taxation in IRS.
State raised millions with this understanding
In recent years, with the valorization of the real estate market, many of these internal operations have resulted in large payments to the state. Taxpayers, due to ignorance or lack of alternatives, eventually accepted the charge.
According to the same source, the decision of the STA Creates jurisprudence and may have an impact on thousands of similar tax processes underway or already completed. The decision also opens the door to the return of the amounts paid, provided that within the legal deadline.
Who can ask for a refund?
The deadline to request the tax review paid is four years from the date of settlement. That is, those who have sold or bought hereditary shares since 2020 may still have time to request the refund.
It writes the same newspaper that this type of correction must be formally requested, and the support of an official accountable technician or coach is advisable. The complexity of the process and the specificity of the legal framework requires extra attention.
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Tornas are not added value
It is important to stress that the payment of the tornos (monetary compensations between heirs) does not represent a patrimonial gain. In practice, it is just a quota rebalancing, not a market transaction.
Explains the Eco website that the doctrine was already warning of this excessive interpretation of the Tax Authority, arguing that the Torns should not be the target of autonomous taxation. With this judgment, this position gains legal strength.
Immediate and future impact
The Supreme Court decision can lead to a reevaluation of tax practices in this type of situations. Although it has no universal mandatory force, the judgment serves as a reference for future decisions and may be used as a valid argument in contestations and tax review requests.
According to Jornal de Negócios, the Tax Authority has not yet officially commented on the decision, but it is expected that internal instructions may be adjusted.
What to do now
Those who are in this situation should gather the documentation of the hereditary process, the payments made and the corresponding IRS statements, and to seek counseling with a specialized professional.
The recovery of inheritance values may vary depending on the cases, but, according to the technicians consulted by, there are situations where the returned amounts can reach several thousand euros.
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