PERU Law and Practice Contributed by: Percy Castle, Violeta Moncada, Angel Quispe and Dayana Evangelista, Casahierro Abogados
2.5 Transfer of Property The effect of a transfer of assets on the “tax basis” depends on whether it is a transfer upon death or an inter vivos transfer. In both cases, the logic of income tax is to preserve the continuity of the asset’s value for purposes of any future capital gain, avoiding the trans - fer resulting in an automatic step-up of the tax value. Inheritance is not subject to Income Tax; however, it directly affects the cost basis assumed by the heirs. In successions, the heir generally retains the decedent’s cost basis, provided that the value can be substanti - ated. This treatment impacts future taxation when the asset is ultimately sold. In the case of donations and advancements of forced heirship, the same principle of continuity of basis applies. By contrast, in sales, the tax basis is estab - lished at the acquisition price. In all cases, the system is designed to tax the actual capital gain upon dispo - sition, generally at a rate of 5% for individuals in the case of Peruvian income source. The transfer of real estate is subject to a 3% prop - erty transfer tax (“Alcabala tax”). The first ten tax units (UIT) are exempt; each UIT is a monetary reference set annually by the government in local currency, cur - rently around USD1,617, and adjusted yearly. The tax is assessed by the local municipality and must be paid by the acquirer. Importantly, this tax is not applicable in case of transfers caused by the foretaste of the inheritance. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms In Peru, succession planning benefits from a key advantage: there is no inheritance or gift tax, which makes it possible to structure transfers of wealth with - out an immediate tax burden. However, it is always important to bear in mind that income tax is carried over in the event of a future sale and, in the case of real estate, the Alcabala tax as well. In this context, the most commonly used mechanisms combine tax efficiency and asset control, particularly the advance - ment of forced heirship – frequently with reservation of usufruct – which allows property to be transferred to the heirs without losing the use and enjoyment of
the asset, as well as avoiding payment of the Alcabala Tax. For more sophisticated estates, corporate structures (family holdings) are used, which make it possible to “corporatise” the assets and facilitate transfer through shares, optimising management and governance. Likewise, trusts – although less widespread – offer a robust solution to organise succession, protect assets, and establish conditional distribution rules. In practice, the key lies in combining these tools accord - ing to the family profile, balancing control, tax effi - ciency and intergenerational sustainability. 2.7 Transfer of Assets: Digital Assets Digital assets form part of the decedent’s transfer - able estate under the general rules of succession law, despite the absence of specific regulation regarding “digital inheritance.” Legal practice has been integrat - ing these assets into traditional categories, distin - guishing between those with economic content – such as cryptocurrencies, tokens or balances in digital plat - forms – which do form part of the estate, and those of a strictly personal nature – such as email accounts or social media – whose treatment is more closely linked to privacy rights than to ownership. This distinction is key to defining what may actually be transferred and under what conditions. The main challenge is actually operational, since access to and control over these assets depends on credentials, private keys, and contractual conditions imposed by technological platforms, often foreign. For this reason, modern succession planning incor - porates specific access protocols, the use of digital legacy tools, and, in some cases, custody structures or secure instructions in a will. From a tax perspective, although inherited acquisition is not taxed, a subse - quent sale may generate income tax on the capital gain.
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