Extension of Duty Relief for Certain Business Transfers Causa Mortis – Legal Notice 250 of 2026

Legal Notice 250 of 2026 introduces a reduced duty rate for certain business assets acquired causa mortis where a genuine lifetime transfer was interrupted by the prospective donor’s death. The conditions, documentation requirements and succession-planning implications are outlined below.

Subsidiary Legislation 364.15 provides for a reduced duty rate on certain gratuitous transfers of:

• marketable securities issued by a company; and
• qualifying immovable property, being a commercial tenement as defined in article 1525 of the Civil Code, used in a family business for at least three years before the transfer.

The reduced rate applies where the assets are transferred by gratuitous title to persons referred to in article 5(2)(e)(i) of the Income Tax Act, namely the transferor’s spouse, descendants and ascendants and their respective spouses. In the absence of descendants, the reduced rate may also apply to transfers made to the transferor’s siblings and their descendants. The framework currently applies to qualifying inter vivos transfers made before 1 January 2027.

Prior to the 2026 amendment, the relief applied to donations made during the donor’s lifetime which were completed by public deed. This could create an unintended outcome where a genuine succession plan had already been initiated, but the donor died before the deed of donation was finalised.

Legal Notice 250 of 2026 extends the application of this reduced rate to certain acquisitions causa mortis where a planned lifetime transfer was interrupted by the prospective donor's death, through the introduction of a new article 8.

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When can the new relief apply?

The new provision applies where written evidence demonstrates that, prior to death, an individual had a genuine intention to transfer qualifying property by gratuitous title to an eligible person.

The relief is subject to several conditions. In particular:

1. Proof in writing must demonstrate that the deceased had a genuine intention to make a transfer by gratuitous title to the persons referred to in article 5(2)(e)(i) ITA.
2. The proposed transfer must have satisfied all the conditions and eligibility requirements of the existing Order had it been completed immediately before the individual’s death.
3. The transfer must have remained incomplete solely because the death of the donor occurred before the relevant public deed was executed.
4. The property must be acquired causa mortis by the same person identified in the written evidence as the intended donee of the proposed lifetime transfer.
5. The causa mortis acquisition by the intended donee must not be prevented, altered, redirected or otherwise affected by any provision of a will, any other testamentary disposition or the operation of law.
6. The proposed transfer must have been bona fide and must not have been intended to avoid any applicable legal provision.
7. The proposed transfer must not have been abandoned, revoked, withdrawn or materially altered before the death of the deceased.
8. It must be established that, but for the individual’s death, the transfer would have been completed in the ordinary course of events.
9. The relief applies only where the deceased passed away after 31 December 2025.

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Importance of written evidence

Written evidence is required to establish that, before death, the deceased genuinely intended to complete the gratuitous transfer. Article 8 provides separate evidentiary routes, each with its own formalities. Documents expressly recognised under article 8(3)(b) may be relied upon directly. Other forms of written evidence may also be considered by the Commissioner, but must be endorsed by an advocate, notary or certified public accountant within 365 days from the date of death.

The documents recognised under article 8(3)(b) include written promises of donation, agreements, declarations, succession plans, shareholders' agreements, board resolutions and other written instruments evidencing the proposed transfer. The relevant document must have been signed by the deceased and must clearly evidence the proposed transfer.

A separate evidentiary route is available where substantial and demonstrable steps had been taken towards completing the proposed transfer. Where reliance is placed on evidence falling within article 8(3)(a) or (c), it must be accompanied by the prescribed declaration under oath made by a warranted advocate, certified public accountant, notary public or other professional person acceptable to the Commissioner.

The burden of proving entitlement lies with the intended donee. Compliance with the documentary formalities does not, of itself, guarantee acceptance of the claim. The Commissioner must also be satisfied that all substantive conditions for the relief are met before issuing a certificate confirming entitlement, which must be attached to the declaration of the relevant transfer causa mortis.

Entitlement is therefore not automatic. The Commissioner may reject documentary evidence that is not considered appropriate for establishing the relevant requirements, or refuse the claim where the objective evidence does not demonstrate that the intended transfer would have qualified for the reduced rate had it been completed before the deceased's death.

This requirement highlights the importance of formally documenting succession-planning decisions at an early stage. Informal discussions or an undocumented intention may not be sufficient to establish entitlement to the reduced rate.

Individuals considering the transfer of shares or business property should therefore ensure that the proposed transaction, the identity of the intended recipient and the relevant property are clearly recorded.

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What is the applicable duty rate?

Where all the conditions are met, the causa mortis acquisition is chargeable to duty at the rate of €1.50 for every €100 or part thereof of the value of the property.

The causa mortis acquisition benefiting from article 8 remains subject to the existing clawback provisions contained in articles 5 and 6 of the Order. Accordingly, the benefit may be forfeited where the recipient transfers the relevant marketable securities or business property inter vivos within three years of the qualifying causa mortis acquisition. In the case of business property, the relief may also be forfeited if the property is not used in a business carried on by the recipient throughout the applicable three-year period.

Conclusion

The amendment is a welcome development for family business succession planning. It recognises the practical reality that succession planning may take place over an extended period and that unexpected events may intervene before a transfer is formally completed. It therefore provides a potential remedy where genuine and documented steps towards implementing a lifetime transfer were already underway, but the transaction was interrupted by the prospective donor's death.

Early tax and succession planning can help ensure that an intended transfer is properly structured, documented and aligned with the individual’s estate plan.