Undivided Inheritance, Disposal of Hereditary Share and Capital Gains: Supreme Administrative Court upholds the heirs.

The Supreme Administrative Court has ruled that the sale of a hereditary share is not subject to IRS on capital gains.

This change has a real fiscal impact for thousands of Portuguese people who still don’t share their property for various reasons, most of them fiscal.

The Tax Authority considered that the sale of a hereditary share was in all respects the same as the normal sale of a property, charging IRS on capital gains, even if the heir had never enjoyed the property received by inheritance.

What changes with this new paradigm?

The Supreme Court has clarified that the sale of an heir’s share of an inheritance is not the same as the sale of a property, as it is only the transfer of a hereditary position and not the sale of immovable property.

As a result, no IRS is payable on the capital gains obtained from these transfers.

Be aware that if you have already paid tax on such a transfer, you can ask the AT for an ex-officio review or go to court.