Kristine Attard | Director – Tax & Global Mobility, CLA Malta
Legal Notice 250 of 2026 extends the 1.5% preferential duty rate on qualifying donations of marketable securities and immovable property used for business to certain transfers causa mortis, where the donor died before a genuinely intended donation could be completed.
At a glance
- LN 250 of 2026 amends S.L. 364.15, which governs the duty treatment of donations of marketable securities and immovable property used for business.
- The 1.5% preferential duty rate may now extend to certain transfers causa mortis.
- The extension applies where the deceased had a genuine intention, before death, to make a qualifying donation.
- The relief is not automatic: the statutory conditions must still be satisfied, and evidence of the deceased’s intention may be important in establishing eligibility.
The existing regime
The Duty on Donations of Marketable Securities and Immovable Property Used for Business (Exemption) Order (S.L. 364.15) provides preferential duty treatment for qualifying donations of marketable securities and immovable property used for business, subject to the applicable statutory conditions. Where those conditions are satisfied, qualifying transfers may benefit from a reduced duty rate of 1.5%.
The regime is particularly relevant to family businesses and to the transfer of business assets within qualifying family relationships.
What LN 250 of 2026 changes
Without the amendment, the death of an intended donor before completion of the donation could potentially prevent the intended transaction from benefiting from the preferential regime.
LN 250 of 2026 addresses this situation. Under the amendment, the preferential treatment may also apply where the relevant assets are subsequently transferred causa mortis, provided it can be established that the deceased had a genuine intention to make a qualifying donation before death.
A practical example
A parent intends to transfer qualifying shares in a family business to a child by way of donation, and takes steps towards implementing the donation, but dies before the transfer is completed.
Following LN 250 of 2026, the subsequent transfer of the shares causa mortis may potentially benefit from the preferential duty treatment, provided the statutory requirements are satisfied and it can be demonstrated that the parent genuinely intended to make the qualifying donation before death.
Demonstrating genuine intention
The extension is not automatic. A causa mortis transfer will need to satisfy the conditions applicable under the amended Order, including the requirement to establish the deceased’s genuine intention to make the qualifying donation. Evidence of that intention may therefore become particularly relevant in determining whether the preferential duty treatment is available.
Such evidence could include contemporaneous documentation and other records demonstrating that the proposed donation was genuinely contemplated, or was in the process of being implemented, prior to the deceased’s death.
Implications for succession and family-business planning
The amendment provides greater flexibility where a planned qualifying donation cannot be completed during the donor’s lifetime due to death. It also highlights the importance of maintaining appropriate documentation whenever a qualifying donation is being contemplated or implemented, as that evidence may be relevant when seeking to apply the preferential regime to a subsequent causa mortis transfer.
The amendment therefore merits particular consideration in succession and family-business planning, especially where a proposed qualifying donation remains incomplete at the time of the donor’s death.
Sorumluluk Reddi
This article is intended for general information purposes only and reflects the position as at 25 Eylül 2026. It does not constitute tax or legal advice and should not be relied upon as such. Specific professional advice should be obtained before acting on any of the matters discussed. CLA Malta accepts no liability for any action taken or not taken on the basis of this article.