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Italian Inheritance Tax can be very convenient and surprisingly lower than you might expect!

Indeed, even if according to the Italian Inheritance law 3 different rates applystarting from 4%, it is provided a tax-free allowance up to €1.000.000,00 per person (depending on the heir’s category – please see table below). In which case the asset transfer by succession will be completely free from inheritance tax for the heirs. 

However, whether it intestate succession or testamentary succession, in both cases under Italian law it is compulsory for the beneficiaries to file an Italian Inheritance Declaration (Dichiarazione di successione) to the Italian Tax authority (Agenzia delle Entrate) within one year since the death of the Testator to obtain an Italian Grant of Probate . The complexity of the Italian bureaucracy recommends to seek legal assistance to complete the whole procedure without the risk of sanctions.

Italian Inheritance Tax is levied at three different flat rates, on the whole or part of the Estate of the deceased with reference to the entitled beneficiaries, as follows:

INHERITANCE TAX RATE DESCRIPTION
4% the Estate (or part of it) bequeathed by the deceased’s spouse or children, with a tax-free allowance up to €1,000,000 each (the so called “Franchigia”)
6%

the Estate (or part of it) devolves to:

–       brothers or sisters (subject to a Franchigia of €100,000 each)

–       other relatives of the deceased up to the fourth degree (without any Franchigia)

8%

the Estate (or part of it) bequeathed by unrelated parties.

Where the Estate or part of the Estate devolves to one or more disabled children, the Franchigia is increased to €1,500,000

0% the Estate includes a business or a substantial shareholding in a company (with No Franchigia): it is tax-exempt in case the asset is inherited by the children of the deceased who will undertake to continue the business or control the company for at least five more years.

Nature of the Italian Inheritance Tax: The Imposta sulle Successioni  is applied to all the assets (if the deceased was resident in Italy) or only to the assets located in Italy (in case the deceases was not resident in Italy). Taxes rates are different according to the degree of affinity to the deceased and they may vary according to the deceased homecountry.

For further information please contact our Probate Team

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