Legal Notice 250 of 2026, entitled the Duty on Donations of Marketable Securities and Immovable Property Used for Business (Exemption) (Amendment) Order, 2026, is to be read and construed as one with the Duty on Donations of Marketable Securities and Immovable Property Used for Business (Exemption) Order, Subsidiary Legislation 364.15 of the Laws of Malta (the “Principal Order”).
The Existing Duty Relief
The Principal Order provides for a reduced duty rate of €1.50 for every €100, or part thereof, of the value transferred in respect of qualifying transfers made by gratuitous title (donations).
The relief principally applies to two categories of business assets:
- Marketable Securities – shares or securities in a company held by an individual; and
- Business Property – commercial tenements which have been used in a family business, as defined in the Family Business Act, for at least three consecutive years immediately preceding the transfer.
Extension of the Relief to Causa Mortis Acquisitions
Legal Notice 250 of 2026 introduces a new Article 8 to the Principal Order, extending the preferential duty rate of €1.50 per €100, or part thereof, to certain acquisitions causa mortis.
The amendment addresses circumstances in which an intended transfer of qualifying business assets by gratuitous title could not be completed during the transferor’s lifetime solely because the transferor died before the relevant public deed was executed.
The relief is subject to a number of conditions and evidentiary requirements.
- Date of Death
The deceased transferor must have passed away after the 31st of December 2025.
- Genuine Intention to Transfer
It must be established that the deceased had a genuine intention to effect the transfer by gratuitous title during his or her lifetime.
The intended transfer must not have been revoked and must have satisfied all applicable conditions for the relief had the transfer been completed during the deceased’s lifetime. Furthermore, the intended transfer must not have been designed or intended to avoid the application of any provision of law.
- Direct Devolution to the Intended Recipient
The relevant property or marketable securities must devolve upon, and be acquired causa mortis by, the person who had been identified as the intended recipient of the lifetime transfer.
Accordingly, the assets must not be redirected to another person or otherwise affected by a will, testamentary disposition or operation of law in a manner inconsistent with the intended transfer.
- Written Evidence and Sworn Declaration
The intended donee must produce written evidence demonstrating the deceased’s genuine intention to effect the transfer by gratuitous title.
Such evidence may include; a written promise of donation, succession plan, shareholders’ agreement, board resolution, or documentation evidencing substantial steps taken towards completing the proposed transfer.
The written evidence must demonstrate that the deceased genuinely intended to make a transfer by gratuitous title to one or more of the persons referred to in Article 5(2)(e)(i) of the Income Tax Act. These include the transferor’s spouse, descendants and ascendants, and their respective spouses. In the absence of descendants, the reduced rate may also apply to transfers in favour of the transferor’s siblings and their descendants.
The written evidence must be supported by a sworn declaration made by a warranted advocate, certified public accountant (CPA), or notary public.
Where the evidence does not consist of a pre-existing formal document, it must be endorsed by the relevant professional within 365 days from the date of death.
- Continued Application of Retention Requirements
The forfeiture provisions contained in Articles 5 and 6 of the Principal Order continue to apply to qualifying causa mortis acquisitions.
Accordingly, the applicable requirements concerning the retention of ownership and, where relevant, the continued use of the property for business purposes for a period of at least three years remain applicable.
- Certification by the Commissioner for Revenue
Entitlement to the relief must be established to the satisfaction of the Commissioner for Revenue.
Where the applicable requirements are satisfied, the Commissioner will issue a certificate confirming entitlement to the reduced rate. This certificate must be attached to the relevant causa mortis declaration.
Additional Requirements
In addition to the above, the intended transfer must have satisfied all the conditions and eligibility requirements under the Principal Order had it been completed immediately prior to the individual’s death.
It must also be established that the transfer remained incomplete solely because the intended donor died before the relevant public deed could be executed and that, but for the donor’s death, the transfer would have been completed in the ordinary course of events.
Conclusion
Legal Notice 250 of 2026 therefore extends the existing duty relief applicable to qualifying lifetime donations of business assets to specific causa mortis acquisitions. The amendment is particularly relevant in succession-planning scenarios where concrete steps towards a qualifying lifetime transfer had already been taken, but the transaction could not be formally completed due to the intended donor’s death.
The availability of the relief is, however, dependent on compliance with the conditions prescribed by the Principal Order and the new Article 8, including the requirement to demonstrate, through appropriate written evidence and professional confirmation, a genuine and sufficiently established intention to complete the transfer during the deceased’s lifetime.
