Italian inheritance tax: what it is, how to calculate it and how to submit an inheritance tax return – Inheritance tax

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Italian inheritance tax: what is it

Italian inheritance tax is a tax payable by an heir when they receive money or property from the estate of a deceased person.

The amount of inheritance tax can be calculated on the basis of the inheritance tax declaration, which must be submitted to the Italian Revenue Agency.

Italian inheritance tax: How much is inheritance tax in Italy?

Below are the Italian inheritance rates and exemptions:

– 4% of the total value of the estate in the event of transmission to the spouse or to direct relatives, with exemption for portions of the estate of less than 1 million euros;

– 6% of the total value of the estate in the event of transmission to siblings, with exemption for portions of the estate less than 100,000 euros each;

– 6% in the event of transfer to relatives up to the fourth degree and to allies in the collateral line up to the third degree of kinship, without exemption;

– 8% for all other people, without derogation.

Italian inheritance tax must be paid within 60 days of receiving notice of payment from the Tax Agency.

Italian inheritance tax is calculated based on the contents of the inheritance tax return.

After the 60 day period has expired, if no payment has been made, additional penalties and interest will apply.

It should also be noted that Italian inheritance tax, when over €1,000.00, can be paid in instalments.

Italian inheritance tax: inheritance tax declaration and persons liable

The inheritance tax declaration must be submitted within 12 months of the death of the deceased (i.e. within 12 months of the succession) to the Italian Revenue Agency, and in particular to the office in the jurisdiction of which the deceased resided, by one of the persons liable to pay it.

In the event that the last place of residence of the deceased is unknown, the declaration of inheritance tax must be filed with the tax authorities of Rome (“residual” jurisdiction).

The following persons are required to file an inheritance tax return:

– alternate heirs and legatees;

– the executors of the deceased;

– estate administrators and trustees;

– the beneficiaries of the temporary possession of the estate of the deceased.

Conversely, in Italy, a person who renounces an inheritance within the 12-month period is exempt from paying inheritance tax.

In accordance with principle of territoriality, inheritance tax must be paid according to the country in which the deceased resided. In other words, the payment of inheritance tax is linked to assets and rights existing in Italy or abroad, in the event that the deceased was an Italian resident at the time of his death.

In case the deceased was a non-Italian resident, only properties located in Italy can be taxed.

Italian Inheritance Tax: European Certificate of Succession

National inheritance laws vary widely from one European country to another. For this reason, in the event that non-Italian persons are involved in an inheritance, it is very important to determine which law is applicable to the inheritance itself.

In matters of inheritance of foreign persons, Italian law no. 218/1995 and the European regulationEU n°650/2012 relating to successions and the creation of a European certificate of succession (applicable to estates of persons who died on or after August 17, 2015) apply.

Aiming to harmonize the various European regulations and taxes on inheritance, the European Certificate of Succession is a document certifying the status of heir in each European country.

The European Certificate of Succession is issued by the State of residence of the deceased. The advantage is that it has the same effect in all European countries, regardless of the country from which it was issued.

In Italy, notaries are competent to issue the European Certificate of Succession.

The authority which issued the European Certificate of Succession retains the original, while providing the heir, the executor or the administrator of the succession with certified true copies which will be valid for 6 months and whose validity may be extended.

If you need more information on how to accept an inheritance, click here.

Do you have problems with Italian inheritance tax? We can help you.

The international law firm Arnone&Sicomo assists Italian and non-Italian residents who have inherited property or assets in Italy.

We help our clients to obtain the European certificate of succession and to complete the declaration of succession in the event that the deceased last resided in Italian territory.

We carry out all the formalities for our foreign clients to enable them to take possession of an inheritance in Italy, whether it is current account assets or real estate. We accept or waive estates on behalf of our clients through special powers of attorney.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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