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Do beneficiaries have to pay taxes on inheritance?

If you are wondering whether beneficiaries have to pay inheritance taxes, the answer is yes.

In Italy, inheritance tax is a tax that heirs of property or real estate rights have to pay.

Inheritance tax, who pays?

When you receive an inheritance it is compulsory to submit the statement of succession (Dichiarazione di successione) to the Italian Inland Revenue (Agenzia delle Entrate), which carries out the calculation of the inheritance tax. The statement of succession must be lodged with the Italian Inland Revenue within 12 months as of the opening of the succession procedure, which usually coincides with the testator’s death.

However, it should be noted that there is no obligation to file a statement of succession if the estate does not contain any properties or if the assets are valued at less than Euro 100,000 and are left to the spouse or relatives in a straight line.

What is taxable?

  • Immovable property (houses, shops, buildings), agricultural or building land;
  • Movable property, including boats, jewellery, works of art, bank and post office current accounts, money, investments such as shares, bonds, trust funds, etc.
  • Companies and shareholdings, with the exception of cases provided for by law which exempt heirs from the inheritance tax.

How is the inheritance tax calculated?

Estate tax applies to the entire net value of the deceased’s estate, including movable and immovable assets.

Basic inheritance tax in Italy (Imposta sulle Successioni) equates to 8% of the estate, but Rates may depend on the relationship of the beneficiary with the deceased: it may drop to 6% between siblings, relatives up to the fourth degree (cousins) and relatives up to the third degree (for instance, a spouse’s uncle), and 4% in the case of direct heirs (children, spouse, civil partner).

Below a table which summarises such calculation:

 

INHERITANCE TAXES

 

Heir Rate (Aliquota) Exemption up to
Spouse, relatives in a straight line (parents, grandparents, children, children’s children…) 4% 1.000.000 euro
Brothers and sisters 6% 100.000 euro
Other relatives up to grade 4, related in a straight line, related in a collateral line up to grade 3 6% No exemption
Other subjects 8% No exemption

 

Inheritance taxes in Italy may represent a very complex mater and it may also change from case to case. For this reason, being supported by an expert is of crucial importance.

If you wish to deepen your case with us or you are feeling unsure about anything inheritance tax-related and need advice, do not hesitate to contact us for a free preliminary consultation.

You may also be interested in: Inheritance Law and Taxes

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