Italian inheritance tax, “Imposte di Successione” was abolished by law no. 383 of 18 October 2001. Subsequently, the government re-introduced inheritance tax through law no. 286, dated 24th November 2006. The law has been applicable to inheritance cases since 3rd October 2006.
What does Italian Inheritance Tax apply to?
Although Italian inheritance tax is not considered to be as severe as in some other EU Member States, it is very complex and many people are unaware of how it operates. Italian inheritance tax applies to the following categories of assets:
-Real Estate Property
-Private bonds (not government bonds)
-Equity or shares in a non-family business
-Managed Funds
-Savings and bank accounts
-Furniture, jewellery
-Trust assets
It is important to review the balance of your assets in the above mentioned categories, especially if you have children or stand to inherit assets from an estate with Italian assets. It may be worthwhile considering or making changes to protect your assets and it is crucial to plan carefully for the transition of assets within the family. There are actions that you can take to limit the impact of Italian inheritance tax on family assets. Please contact me if you have inheritance tax concerns or would like to discuss your situation.
Real estate Property
As far as real estate property is concerned, there are some particular provisions to bear in mind. The income value of real estate property is calculated based on capitalised cadastral annuity. The coefficients of re-evaluation, in order to obtain the cadastral value of property, are the following:
-Agricultural land: €112,50
-Buildings – Cat. C/1 and E: € 42,84
-Buildings – Cat. A/10 and D: €63,00
-Buildings – Cat. B: €147,00
-Other buildings: €126,00
-Habitable buildings, primary residences and relative appurtenances: €115,50
Tax is applied proportionally to individual heirs or legatees dependent on their relationship to the decedent and the category of assets inherited. The table below summarises aliquots and exemptions from inheritance tax related to Italian property:
| BENEFICIARY | INHERITANCE TAX | ASSET CATEGORY | REGISTRATION TAX | CADASTRAL TAX |
| Spouse and / or Children | Value of assets & rights: 4%
Below €1 million value, tax exempt. |
· Primary Residence
· Other property · Other assets |
€200
2% – |
€ 168
1% – |
| Siblings | Value of assets & rights: 6%
Below €1 million value, tax exempt. |
· Primary Residence
· Other property · Other assets |
€200
2% – |
€ 168
1% – |
| 4th Degree Relative | Value of assets & rights: 6% | · Primary Residence
· Other property · Other assets |
€200
2% – |
€ 168
1% – |
| Other | Value of assets & rights: 8% | · Primary Residence
· Other property · Other assets |
€200
2% – |
€ 168
1% – |
In accordance with the Italian Disabilities Act, the threshold from which disabled beneficiaries are liable for inheritance tax is €1.5 million.
The same aliquots as mentioned in the table above, also apply to lifetime gifting of a title deed.
Assets excluded from Italian Inheritance Tax
Certain categories of assets are considered exempt and, therefore, are excluded from Italian inheritance tax. These include:
-Government bonds
-Unit linked whole of life insurance policies
-Shareholdings in family businesses
-Certain charitable donations
Conclusion:
If you require legal assistance regarding Italian inheritance matters, whether it’s understanding the legal principles or addressing specific concerns, please contact me directly.
Remember, when it comes to Italian inheritance, knowledge and legal counsel are key to protecting your rights and ensuring a successful outcome. Share your experiences or reach out for assistance to make the most informed decisions regarding your inheritance matters in Italy.
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