Inheritance matters and Italian Inheritance Tax are issues which need to be given serious consideration when moving to Italy and becoming a resident.
These tax rates may be vastly different from your country of origin and should be a point of reference for the future when planning your Italian Will and Inheritance. If the deceased was resident in Italy, Italian Inheritance Tax (Imposta sulle Successioni) is applied to all the assets belonging to the deceased, including those worldwide. However, in case of a non resident, the Italian Inheritance Tax is calculated on the assets located solely in Italy. It would be advisable to immediately seek advice from specialised professionals, since Italy grants different international agreements, which prevent the double taxation of estates.
Different rates are applied to each heir according to the degree of kinship to the deceased. We can summarise the different rates in the following way:
– 4% to be paid for transfers to the surviving spouse and children, with an exemption of Euro 1,000,000,000 for each beneficiary.
– 6% to be paid for transfers to brother and sisters of the deceased, with an exemption of Euro 1,000,000 for each beneficiary.
– 6% to be paid for transfers to relatives within the fourth degree of relationship to the Deceased, and other relative on the spouse side up to the third degree (no exempt amount is available)
– 8% to be paid for transfers to any other (unrelated) parties.
Both rates and exemptions are calculated over the whole net value of the assets included in the deceased’s estate according to the current Italian inheritance tax regime. This amount is net of liabilities and all deductible expenses, such as debts of the deceased, medical and funeral expenses. The assets involved in the inheritance procedure are immovable properties, companies, shares/holdings, credits and money deposited in a bank account. Below is a summary of information concerning the current Italian inheritance tax regime:
Degree of kinship Exemption Rate to be applied over the exceeding quota
Spouse or direct members of the family Up to 1 million euro 4%
Brothers and sisters Up to 100.000 euro 6%
Family members up to the fourth degree of kinship, direct relatives and collateral relatives up to the third degree No exemption 6%
Others No exemption 8%
In any case of inheritance of real estate property, the payment of a 3% (or € 168 as above described) registration tax is required.
It is also important to be aware that Italy has signed double taxation agreements with several
countries (amongst others, the United Kingdom and the United States). To safeguard rights and to ensure payment of the correct amount according to the Italian inheritance tax regime, it is highly advisable to obtain professional expertise in the field of cross border inheritance matters.