On March 4, 2025, an initiative to reform the Income Tax Act (LISR) was presented to the Congress of Mexico City with the objective of establishing a progressive tax on inheritances, legacies and donations exceeding 15 million pesos. If approved, the measure would establish tax rates of 10% to 30% on these revenues [1].
CURRENT REGULATION AND PROPOSED CHANGES
To date, inheritances and bequests are exempt from income tax, while donations are only exempt if they are made between spouses, ascendants or descendants in a straight line (with respect to children, grandchildren, parents and grandparents).
The initiative seeks to modify this scheme by eliminating the exemption for large amounts and establishing a progressive tax. The main proposed changes include:
IMPLICATIONS AND NEXT STEPS
Given the potential impact of this initiative, it's crucial that high-net-worth individuals evaluate tax and wealth strategies to anticipate potential effects. We will continue to monitor the evolution of this proposal and its tax implications for our clients.
We hope that the information provided will be useful and we are at your disposal for any questions or clarifications in this regard. For any additional questions, do not hesitate to contact our partner Ana Lavín Through the mail a.lavin@glzabogados.com
[1] Parliamentary Gazette of Mexico City, March 4, 2025, pp. 674—707. Available in: https://www.congresocdmx.gob.mx/media/documentos/bcccdae88dbcd5a7fa931f5107b08158dce2b11b.pdf
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