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New interpretation of the Federal Revenue redefines taxation of inheritances via VGBL, affects successor planning, and increases the risk of judicial disputes involving private pension and income tax.
The Federal Revenue has consolidated the understanding that beneficiaries of VGBL plans received after the death of the holder do not have total exemption from Income Tax.
According to the Consultation Solution Cosit No. 28, published on March 4, 2026, the portion paid as death risk coverage remains exempt, but the accumulated earnings in the plan will be taxed at the time of receipt.
This guidance has binding effect within the federal tax administration and is likely to influence how banks, insurers, and other financial institutions handle these payments.
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Taxation of VGBL after the death of the holder
In practice, this understanding affects an important piece of successor planning in the country.
The VGBL is widely used to organize the transfer of assets because it allows for the direct designation of beneficiaries and, as a rule, does not depend on probate for payment.
This design helped transform the product into a frequent alternative for families seeking speed in succession and lower tax friction.
How the Revenue started to divide the VGBL
The new interpretation separates the amounts received due to the death of the insured according to the economic origin of each portion.
The first part is the insured capital linked to the risk coverage, treated as compensation for death and, therefore, exempt from Income Tax.
The second corresponds to the balance of the Mathematical Provision for Benefits to be Granted, that is, the resources accumulated during the phase when the holder had not yet started receiving income.
On this amount, the Revenue predicts taxation only on the gain, calculated by the positive difference between the amount received and the sum of the premiums paid.
There is also a third hypothesis, less intuitive for the taxpayer.
When the holder was already in the income receipt phase and dies before the termination of the contract, the remaining balance ceases to be treated as simple insurance compensation.
In this case, the Revenue considers that the beneficiaries begin to receive the continuation of a benefit already granted, subject to the normal Income Tax rules applicable to the contracted plan.
Taxation regimes and financial impact
The taxation regime chosen in the contract also alters the financial effect of this charge.
In plans subject to the progressive regime, withholding at source occurs as an advance of the tax due, with the possibility of subsequent adjustment in the annual declaration.
In the regressive regime, the incidence at source is definitive, without future compensation, and the rates vary according to the accumulation period.
What changes for heirs and beneficiaries
Although the discussion has gained strength with the publication of the Cosit solution, the line adopted by the Tax Authority did not emerge now.
The Revenue had already been maintaining that the legal exemption applies only to the pure insurance component, and not to the redemption of accumulated contributions with earnings.
This means that, for many taxpayers, the novelty will not be exactly an unprecedented charge, but the formal standardization of an interpretation that previously appeared in a dispersed manner.
The publication of a consultation solution raises the degree of administrative predictability and tends to standardize the actions of tax auditors.
The practical effect directly impacts the planning of families who saw the VGBL as a way to transmit resources with lower tax exposure.
Litigation is expected to increase with new rule
The most sensitive point lies in the divergence between the Revenue’s reading and decisions already recorded in the Judiciary.
The Superior Court of Justice has established the understanding that amounts paid to beneficiaries of VGBL after the death of the contractor do not integrate the inheritance, highlighting the insurance nature of the product in this situation.
Although this ruling deals with state tax, it strengthened the perception that the VGBL retains its insurance nature when the holder passes away.
In federal courts, there are decisions that recognize exemption from Income Tax on amounts received due to death, based on current legislation.
It is from this tension that the prospect of mass litigation arises.
Tax experts assess that the administrative solution does not end the controversy but makes it more evident.
As the Revenue’s understanding binds its internal actions, taxpayers who disagree with the charge tend to seek the Judiciary to remove the incidence.
Successor planning requires new attention
For those who already have VGBL or intend to use the product in successor planning, attention now turns to the structure of the contract and the chosen tax regime.
A plan in the accumulation phase can produce a different tax effect from one that has already been converted into income.
Furthermore, withholding at source becomes a central element in calculating the net amount that will reach the beneficiary.
The scenario also requires caution when comparing VGBL with other succession instruments.
The advantage of avoiding probate remains relevant, but the discussion about Income Tax shows that the tax component has become more complex and subject to judicial disputes.
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