Executor in Italian Succession

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What is the role of an executor in Italian succession?


Only a testator may appoint an executor in a will. An executor in an Italian succession procedure is responsible for managing your last wishes and the administration of your estate. Your appointed executor should agree to undertake to manage your estate with all reasonable care.

In Italy, an executor manages all succession procedures in accordance with Italian legislation

First, the executor must take possession of all the assets included in your estate. Then the executor manages the distribution of assets and bequests to heirs in accordance with your will. If you appoint an executor, your heirs may neither manage nor dispose of your assets autonomously.

Appointing an executor is highly recommended in complex personal or patrimonial frameworks. For example, an estate involving cross-border assets. Similarly, if estate transfer is to heirs living outside of Italy or who are not Italian nationals or the testator feels may have vested or conflicts of interest. Another example would be if an heir is legally incapacitated or under the age of 18.

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According to Italian law, an executor has the power to manage the deceased’s estate. As previously mentioned, this involves taking possession of the assets and distributing them among heirs forced and nominated heirs as applicable. Where a court claim or dispute arises, the executor actively and passively represents the deceased. In addition, the executor is responsible for obtaining relevant legal consents where heirs are minors, absent, legally incapacitated or legal entities.

Once the Italian succession procedure is complete, the executor must render detailed accounts. An executor is personally liable to pay any damages to heirs or legatees in case of mismanagement.

Is it possible to take a “DIY” approach to Italian estate administration?

Of course, you don’t need to appoint an executor in your will. Your heirs can manage the whole Italian succession procedure themselves. That said, the death of a relative or friend is a very stressful and emotional time. If the estate involves any complexity such as property in Italy, this can lead to misunderstandings or conflicts among heirs.

If you are making or reviewing your will, appointing an experienced estate lawyer as your executor protects your heirs from misunderstandings. In addition, it will reduce costs deriving from procedural mistakes and inheritance tax calculations.

Likewise if you are an executor of an Italian estate, a lawyer will be able to help with the Italian succession procedure. Engaging a specialist Italian inheritance lawyer will facilitate the whole process. It can save money and headaches with paperwork or red tape and prevents procedural mistakes and omissions. Plus if a costly error does happen, your lawyer is jointly liable.

Finally …

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

Please contact us if you have any questions about your Italian estate planning.

Make an Italian Will if you own property in Italy

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Making an Italian will facilitates the Italian succession process


Do you own property at home and in Italy? If so, we would advise that you make an Italian will. If you are resident in Italy at the time of your death, Italian Inheritance law is applicable to your worldwide assets. Whereas if you were resident outside Italy, Italian inheritance law is applicable to assets in Italy. Either way, Italian law governs your Italian property.

Making an Italian will therefore facilitate the way forward for those you leave behind. It reduces translation costs and prevents potentially costly disputes and misinterpretations regarding your wishes. In addition, an Italian will also creates tax and administration efficiencies.

Isn’t making an Italian Will expensive? 

On the contrary, the cost of making an Italian Will is not excessive. It is a worthwhile expense to keep your affairs in order and save stress, time and expense after your death. 

Get Your FREE Guide to Planning Your Inheritance in Italy

Our PDF guide explains the ins and outs of preparing your inheritance under Italian law

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Can you make a DIY will in Italy?

It is possible to make an Italian DIY will. In a previous article, we have provided a simple template for this purpose.

However, if your circumstances are even slightly complex, you could be causing more problems than you solve. If you own assets in Italy and elsewhere, this is a more complex cross-border situation. If you make your own will, without legal assistance, it can lead to mistakes or a lack of clarity. You may even run the risk of your will being invalid.

Seeking legal assistance when making an Italian will is advisable 

If you have a number of beneficiaries, if you own assets in Italy and elsewhere, if you have residential or business connections in Italy, we would always counsel taking legal advice from a specialist Italian inheritance lawyer.

In Italy, couple cannot have a joint will. Each spouse or partner needs their own separate will. Therefore, you should seek advice if you live with someone, if you are married or in a civil partnership. Likewise you should seek advice if you have children from a previous relationship or step-children. The latter may not automatically be beneficiaries of your estate.

Wills, estate-planning and inheritance are serious matters. They touch many lives in many ways. If you die intestate – without a will, you have no say in what happens to your estate. Instead, the division of your estate will be determined by the law of the country (or countries) where your assets are situated.

In Italy, succession law is based on the principle of ‘Unity of Inheritance’. This principle differs substantially from common law. Essentially, you may find that Italian assets you own are not inherited by those who you wished and, the whole estate may not be passed on in the most tax-efficient way.

You should review your will periodically

Estate planning should be an ongoing process, not a one-time event. You should review and update your will as your family and circumstances change. This would include when you make an international investment.

Once you have written your will, you should review it regularly to make sure it reflects your wishes, especially if your life changes. 

Finally …

People put off making a will because they think they do not own enough, they are not old enough, it will be costly or confusing, they will have plenty of time to do it later, they do not know where to begin or who can help them, or they just do not want to think about it.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

Please contact us if you are buying or already own an Italian property and have any questions about making or reviewing a will.

 

You may also like Estate Planning And Tax. Buying An Italian Property.

Italian House: Structural Issues. Where Do You Stand?

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I bought an Italian house then discovered big cracks in the walls 

According to your email, you have just moved into the Italian house you purchased three months ago. Unfortunately you have discovered some serious cracks in the living room and kitchen walls.

You immediately called in a surveyor (geometra), who has informed you that there’s a serious structural problem. In effect, the problem means the property is uninhabitable. You expect to receive a full written report from the surveyor within the next few days. 

What legal action can you take regarding the defects in your Italian house? 

In this case, you have a legal entitlement to dispute the legality of the deed of sale (atto di vendita). However, you will need to take prompt action.

According to Italian Civil Code Sales Contract Law, the vendor is only liable for a short period.

Article 1495 of the Italian Civil Code provides that the purchaser must take legal action within one year from the delivery date of a product. In your case this would be the date you signed the deed of sale for your Italian house.

In addition, you can only take legal action if you, the purchaser, have declared the defect to the vendor within 8 days of discovering the issue.

What does Italian case law say about latent defects in an Italian house?

A ruling by the Court of Caltanissetta in May 2016 stated that if a vendor hides serious structural issues from a purchaser, this constitutes a breach of contract.

Structural defects, such as big cracks in the walls, significantly reduce the value of real estate property and may even render the property uninhabitable.

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If a buyer discovers defects in an Italian property after signing the deed of sale, the buyer has the right to reverse the property transaction. This must however take place within the previously mentioned time frame.

Under Italian Civil Code, if the buyer and vendor cannot reach an amicable resolution, the buyer can institute legal proceedings against the vendor. This is with a view to obtaining restitution of the price the purchaser paid for the property. In exchange, the purchaser must return the property to the vendor.

The buyer has the right to rescind the transaction regardless of the cause of structural defects

In essence, a purchaser has the right to rescind the deed of sale either on the grounds of construction defects, namely the builder’s responsibility, or because of external factors such as subsidence.

This is valid even if the buyer had the property inspected by a surveyor prior to purchasing it. Structural defects are deemed latent. In other words, they are hidden or difficult to see with the naked eye. Therefore, even if a surveyor inspected the property, the defects may not have been visible.

It should be pointed out that patent defects would not entitle a buyer to rescind a deed of sale. Patent defects are those that are easy to see or visible, such as a window that does not close properly, or missing tiling.

Litigation is the traditional process for resolving legal disputes on civil matters

Litigation involves a party starting court action. The plaintiff or claimant is seeking a legal or equitable remedy. By law, a defendant must respond to the plaintiff’s complaint. If the plaintiff is successful, a court will find in the plaintiff’s favour.

In Italy, court cases are generally costly and protracted processes. We would advise you wherever possible, to settle out of court. Parties can settle at any stage. If the dispute cannot be resolved through negotiation, as a last resort, it will need to go to court.

Litigation is tried and tested with a vast body of case law. The court will impose a final decision that parties must respect. The outcomes of litigation are, without exception, legally binding and enforceable, while being subject to appeal.

Ruling by the Court of Caltanissetta

The case we previously mentioned, involved the purchase of a newly constructed apartment. Shortly after moving in, the new owners noticed some cracks on the walls and floors. They spoke to neighbours in their building and discovered that other neighbours had similar problems.

The owners got together and started a litigation against the vendors. The plaintiffs were seeking reversal of their purchase contracts and compensation for damage. The plaintiffs accused the vendors of deliberately hiding the real condition of the properties. For their part, the defendants claimed the buyers had seen the properties before signing the deed of sale.

However, the purchasing parties had only noticed, “a few little holes”, maintaining that, “the real problem hadn’t yet emerged.” Despite the defendants’ declarations, the court ruled that the vendors knew the true state of the apartments because they had participated in a meeting at the Town Hall’s Technical Office, to discuss geological issues related to the site.

The court ruled in the plaintiffs’ favour.

Vendor’s duty

Anyone who sells a good – a mobile phone, a garment, a pair of shoes, or any other item including an Italian house or property – has to guarantee that the good has no inherent flaw. In effect, this guarantees that the item is fit for purpose.

Italian Civil Code states that a vendor of any item must guarantee that the item has no faults, which would make it unusable or unsuitable for its intended use, or would significantly reduce its value.

In the Caltanissetta case, the property presented defects which could cause instability. That would entail a huge risk for the new owner’s safety.

Finally …

Italian contract law is complex. In the case of a litigation, the deed of sale is of great importance. It is vital that you understand the contractual terms and conditions. The deed of sale affects your options to make claims against the vendor. You should always seek independent legal advice when you purchase an Italian property. In order to avoid any conflicts of interest, this should be a lawyer who is not involved with any other parties (vendor, developer).

At De Tullio Law Firm, we have over 55 years of experience managing property transactions throughout Italy. We are always pleased to hear from our readers. If you have a question that you would like us to answer, please get in touch with us.

If you are looking for more information about the Italian property purchasing process, please read our free Guide To Buying Italian Property. You may also like to watch our info videos about Italian property law.

High Net Worth Individual Tax Regime in Italy

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What is Italy’s high net worth individual tax regime? 


On 9th March, 2017, Italy introduced a high net worth individual tax system. 

Pursuant to article 24 bis of Italy’s Budget Bill, a codicil introduced an annual fixed €100 thousand forfeiture substitutive tax rate for foreigners. The tax regime also applies to EU citizens, who decide to move their residence to Italy.

There is no fixed level of income attached to this tax regime. Individuals must be resident in Italy and tax is payable on worldwide income. However, tax will not be due on the value of real estate and financial investments located outside of Italy.

Individuals need to apply for the high net worth individual tax regime

According to the bill, uptake of the high net worth individual tax regime is neither an automatic right nor an obligation – it is a choice.

Individuals electing to take advantage of this fixed tax rate option, will have to file an advance application with the Italian tax authorities. The Agenzia delle Entrate then decides whether or not to grant the forfeiture substitutive tax rate to individuals. The Italian tax authorities will base their decisions on investigations with tax authorities in the individual’s country of origin. They will also check that an individual has not previously been tax resident in Italy.

The option extends to the individual’s family members provided they also meet the conditions of no previous tax residency in Italy. Each family member included in the option is also subject to an annual forfeiture substitutive tax on non-Italian sourced income. This is a lower fixed amount of 25,000 Euros.

If the Agenzia delle Entrate accepts an individual’s application, the option expires after 15 years. It is revocable at any time but in revoking the option, an individual loses the right to restore it.

After the 15 year residence period, the fixed tax rate will no longer be applicable. The individual will thereafter need to decide whether to continue to be resident in Italy. Should an individual continue to reside in Italy, standard tax rates apply.

Italian visa for investors

The Budget Bill also introduces a “visa for investors”. This means that any foreign national bringing a capital of at least €1 billion into Italy, and investing it within three months of arrival, automatically gains entitlement to a two-year residence permit.

Finally …

Should you need help to understand your personal tax situation, please get in touch or seek advice from a qualified accountant registered with the ODCEC, the Italian professional accounting association of certified public accountants, auditors and advisors.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. You may also like to watch our info videos about Italian property law.

Succession Law in Italy

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How does Italian succession law work?

Succession law in Italy is based on the Roman Law principle which protects close members of the family. This partially limits the right of a testator to dispose of assets.

Testamentary Succession is the assignment of the hereditary assets in compliance with the wishes of the testator as set out in an Italian will whereas in the absence of a will, inheritance follows the principles of legal succession. In other words, if the deceased was intestate, Italian succession law determines the distribution of the estate.

Get Your FREE Guide to Planning Your Inheritance in Italy

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Forced Heirship in Italy

Where there is no will, Italian succession law gives rights to a number of legitimate heirs. These heirs have rights to the assets of the deceased. Such heirs are the spouse of the deceased and close relatives up to the 6th degree of connection.

Succession law in Italy reserves a significant quota of the inheritance to closest relatives. The deceased’s spouse, ascendants and descendants are all, “forced heirs”. This means that the testator cannot exclude them with their will.

When drafting an Italian will, the testator is free to dispose of a part of his assets known as a, “disposable quota”. Thus, a testator may only assign part of their assets to non-relatives.

Applicable succession law in Italy

Italian succession law is based on the unity of inheritance which highlights the difference between movable and immovable assets. The law of the last domicile or citizenship of the deceased party is applicable to non-property assets, while the law of the country where the property is located is applicable to property assets.

Therefore, properties in different countries will be subject to the law of the country where each property is located.  The succession procedure closes once estate tax has been paid and all assets, rights and pending payments have been transferred to the heirs. Partition of an estate is either through mutual agreement or as consequence of judicial proceedings.

It is also worth mentioning that non-Italian nationals may be subject to the testamentary succession laws of their own country. If the deceased was resident in Italy at the time of death, Italian Inheritance law applies to the deceased’s worldwide assets. Whereas if the deceased lived outside Italy, Italian inheritance law is only applicable to assets in Italy.

For foreign nationals resident in Italy, the introduction of EU Succession Regulations, known as Brussels IV, may also impact how you manage your cross-border succession. 

Finally …

People put off estate planning because they think they do not own enough, they are not old enough, it will be costly or confusing, they will have plenty of time to do it later, they do not know where to begin or who can help them, or they just do not want to think about it.

Estate planning should be an ongoing process, not a one-time event. You should review and update your will as your family and circumstances change. This would include owning or purchasing a property in Italy. We recommend you seek independent legal advice regarding your personal situation.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border succession matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

Please contact us if you are buying or already own an Italian property or have any questions about your estate planning.

 

For more in depth information about Italian succession, you might find our Italian Succession Guide useful. You may also find our info videos helpful.

 

Do You Have A Dormant Account in Italy?

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How does Italian law define dormant accounts?

According to Italian law, a dormant account contains a sum over €100 that has not been moved by the owner for a period of 10 years.

A dormant account may be with a bank or other financial institution and can be an account or financial instrument. This includes any inactive deposits in savings account books, bank accounts, postal accounts, shares, bonds and government securities.

Is it true that funds in a dormant account can be transferred into an Italian government fund? 

Rules establish that financial institutions can terminate contractual relationships dormant for 10 years or more with sums of at least €100. These dormant funds transfer to the Italian Ministry of Economy and Finance. Article 1 paragraph 343 Law 2005 n. 266 designates these funds for social purposes. 

However, before any sum devolves into the Italian Ministry of Economy and Finance fund, the owners of a dormant account must receive notification from the financial institution.

Thereafter, owners have a period of 180 days to reactivate the dormant account. Either owners can make a transaction or, they can notify the financial institution of their wish to continue the contractual relationship. 

Even if sums have transferred to the government fund, the account owner may still claim a refund. Owners of dormant accounts have 10 years to claim a refund.

Who is entitled to a refund? 

Provided that the ten year statute of limitation has not elapsed, owners of accounts or their assignees can claim a refund. The ten year statute of limitation starts from the date the financial institution transferred sums to the government fund, or the issuance of a banker’s draft.

How do you get a refund?

First, you will have to prove you are the owner or beneficiary of a dormant account. In order to do this you will need to visit the Consap website. This system will ascertain if a dormant account exists according to the data you provide and permit you to download a refund form, which you will need to fill.

Where you have inherited a dormant account, you will need to provide a self-certification document, which will be verified by Consap.

Owners of dormant accounts should check the Consap website for details or they can send their application to:

Consap S.p.A.

Rif. Rapporti dormienti

Via Yser, 14

I-00198 Roma

or via e-mail to rapportidormienti@consap.it

Claimants will need to supply proof of their right to a refund. The type of documents will depend on personal circumstances. These may include:

– Copy of identity card or other ID of the applicant entitled to refund.

– Copy of fiscal code of the applicant entitled to refund.

– The account owner’s death certificate.

– Copy of savings passbook or of a bank statement.

– Statement attesting heir’s entitlement.

– Statement of termination of contractual relationship by the financial institution.

– Notification of transfer to the government fund.

After verifying entitlement to a refund, Consap will transfer payment through methods such as a bank transfer or a banker’s draft.

What if you have moved or haven’t received bank notification about a dormant account?

First, you should contact the financial institution you think may hold an account to ascertain if you are the owner of a dormant account. Secondly, you should notify the financial institution regarding any change of residence. In effect, notification of a change of residence is sufficient to reactivate a dormant account.

I’ve received a letter from the bank but, the dormant account owner has passed away. 

In this case, it is important to remember that not only the owner of a dormant account can reactivate it. An executor can also do this. If there is no executor, beneficiaries should notify the financial institution of their entitlement to succeed to the deceased’s account. Beneficiaries should present the owner’s death certificate with Italian probate and succession documents.

What if there is more than one dormant account at the same bank?

Owners don’t have to reactivate all their dormant accounts. Reactivating one account is sufficient. For example, if there is a dormant current account and a dormant deposit account, reactivating one will make both active.

Finally …

For more in-depth information about Italian succession, you might find our Succession Guide useful.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border property, succession and estate planning matters throughout Italy. Our firm is also a full member of STEP, the world’s leading association for trust and estate practitioners.

If you would like to discuss anything, you can reach us here for a free consultation.

Usucapione Property Rights in Italy

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What are usucapione property rights?

Usucapione property rights in Italy date back to Roman law. The closest terms to Usucapione in common law are limitation of rights and adverse possession.

According to Roman law, so long as someone didn’t take possession of an asset through theft or force, usucapione allowed them to become the lawful proprietor of the asset. The legal owner had a certain period of time to re-claim the asset, but if this didn’t occur, the title passed to the possessor.

Later, Napoleonic law also incorporated Usucapio laws. Today, elements of the legislation still exist in Italian law.

Current usucapione property rights concern the uninterrupted and unchallenged use of an immovable asset by someone who does not actually own the title. This may be land or a building.

Adverse possession is one of the most contentious ways of acquiring a property. Generally, in order to apply to register a title to a property, the adverse possessor of the land or building will have been in possession of, or using the property for 10 years, although there are provisions which extend this to 30 years.

Legally, at the end of the relevant time period, the adverse possessor can apply for a court judgement to become the registered owner of the land or building in question.

Basic requirements of adverse possession

There are five basic requirements that an adverse possessor must meet to successfully claim usucapione property rights:

1. Actual Possession

The adverse possessor must have actual, physical control over the property.

2. Open and Notorious Use

The use and possession of the land must be visible and apparent. This gives notice to the legal owner that someone may make a claim to the property.

3. Exclusive Possession

The adverse possessor cannot occupy the land jointly with the owner or share possession in common with the public.

4. Hostile Possession

Adverse possession must be hostile to the title owner’s interest in the property. The word “hostile” in an adverse possession claim does not mean showing ill will or that the adverse possessor and legal owner are enemies. Rather, it means that the adverse possessor maintains that he or she holds the property as an owner against all other claims to the land.

5. Continuous and Uninterrupted Use

All elements of adverse possession must be met at all times through the relevant period of time. Occasional activity with long gaps in activity therefore fails the test of continuous possession.

Usucapione property rights case

In 2001, a US national inherited a house and land in Italy from an elderly Italian aunt. The nephew had spent many enjoyable summer holidays on the property when he was growing up. He remembered a strip of land between his aunt’s house and the neighbouring property. When his aunt was alive, a neighbour used to cultivate vegetables there. The nephew assumed that the vegetable plot belonged to the neighbour, who was a distant cousin.

Following the aunt’s death, the neighbouring cousin offered to look after everything for the nephew. For many reasons, this seemed like a good idea at the time.  The nephew therefore entrusted the property’s maintenance to his distant cousin. The cousin looked after the American nephew’s property well and continued to use the strip of land between the properties. In fact, the cousin had it fenced and built a patio, barbecue area and a gazebo.

In the summer of 2013, the American nephew retired. He and his wife decided to move to Italy. The nephew decided to have his property surveyed. He discovered in fact, that he owned the land between his and the neighbouring cousin’s property. The question was, did the nephew really own the land anymore? Because of  his cousin’s open and unchallenged use of the property for over 30 years, if the case went to court, it would likely rule against the nephew’s property rights.

Do you find yourself in a similar case?

If you are an Italian property owner, and you do not dispute the use of your property, where do you stand? You, as the legal owner, may well be deemed to have abandoned your property rights. There are several elements needed for adverse possession to apply for title transfer and registration:

– Length of time (10 – 30 years depending on the case).

– Use of the property must be open for all to see.

– Possession must be hostile to the legal owner of the land.

– Gaining a title to property through usucapione requires a court judgement.

As we have seen, usucapione can have a dramatic impact on land ownership rights. An encroachment could result in the title of your property being transferred to an adverse possessor. Under these circumstances, you might have to bring a lawsuit for trespass in order to prevent someone from obtaining the title to your property.

For example, someone who has no legal entitlement to a parcel of your land may have been openly using that land to cultivate vegetables for a decade or more. You, as the legal owner of the land, may even have periodically received some of the produce as a gift. From a legal point of view, this could imply your tacit agreement to the cultivator’s adverse possession of a piece of your land.

Conducting appropriate property searches is vital

If you are considering purchasing property or land in Italy, it is important that you don’t sign any documents or paperwork before conducting appropriate searches. Amongst other things, you should check whether there are any usucapione issues. It is vital to understand exactly what you are buying, where the boundaries are and what type of easements, such as rights of way exist.

Finally …

Purchasing a property anywhere is a major financial commitment for most people. Make sure you safeguard your conveyancing. We would always recommend that you seek independent legal advice before making any legally-binding commitment.

For over 55 years, De Tullio Law Firm has been providing international clients with independent legal advice throughout Italy. We are specialists in cross border property, inheritance and family law.

If you would like further information about buying an Italian property, we are here to help. We can guide you through the whole process or even organise the whole process on your behalf. Get in touch with us for a free preliminary consultation.

For more comprehensive information about the Italian property purchasing process, you might like to read our guide. You may also like to watch our info videos about Italian property law.

Self-Build Projects in Italy

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Dreaming of building your own place in Italy?

In pursuit of their Italian dream home, some people decide on self-build projects in Italy.

If you are thinking of building a house in Italy, we would always advise you to seek independent legal advice before signing any paperwork to do with a land-purchase.

Even, if on paper, it looks as if the land you are contemplating buying has outline planning permission, actually getting a building project off the ground in Italy is extremely complex.

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Italian self-build projects are complex. They need a team

Self-builders will need to navigate a maze of red tape. Zoning and planning laws, environmental restrictions, building permits and regulations – to list but a few.

Self-build projects in Italy really do require the help of a specialist team including an architect, surveyor, lawyer and a notary.

All-too-often, those who go it alone run in to trouble. This jeopardises or ends their self-build dream. Unfortunately, without a team, self-builders often don’t obtain all the relevant permits. This and spiralling costs, may mean that the project never gets off the ground.

Living on site during Italian self-build projects

When self-build projects in Italy do go ahead, living on-site whilst building the property is something many wish to do. Obviously there are advantages such as saving on travel time, being able to keep a close eye on progress and security.

We are often asked by self-builders if they can site a mobile home, RV, or caravan on their land without obtaining planning permission. Essentially this will depend on the designation of the land in question. Self-builders should ascertain this from local authority urban and rural plans (Piano Regolatore). Siting and installation of accommodation on land will also play a role.

Temporary accommodation

The Italian “Building Legislation and Regulation Consolidation Act” (Testo Unico dell’Edilizia) does not permit ground anchor systems for mobile homes, RVs and caravans without a construction permit. In other words, a ground anchoring system on mobile accommodation would legally classify the accommodation as a, “new building”.

However, according to the Decreto Casa, anchor systems are permissible where a temporary installation is within a proper outdoor accommodation setting, such as a camping site.

Anchoring must be temporary. It cannot be seasonal, which would imply a long, possibly permanent stay. The mobile accommodation would therefore contravene the requirements of temporariness. Also, connecting the mobile accommodation to utilities  (power, water, gas etc.) implies the intention of extended or permanent use.

A construction permit with regard to mobile homes, RVs and caravans, is not necessary if the mobile home is on wheels. It must have a roadworthiness  certificate and motor insurance. Installation of accommodation on a mobile support, such as a trailer, unsuitable for road transport is not permitted. The mobile accommodation must fulfil the requirements of temporariness. It must be immediately movable. This means it must be roadworthy so the owner can move it elsewhere. Anchoring is therefore prohibited. The mobile accommodation must also be autonomous in terms of utilities. This means it must have its own water, toilet and electricity.

Permanent accommodation

If the mobile home, RV or caravan is for permanent use, such as residential use during a self-build project, self-builders will require a construction permit.

Under Italian law:

“the siting and installation of accommodation during the building phase of a project does not constitute temporary status. If the accommodation has power, water and gas connections this implies long-term residence. In addition, the same principle applies to anchoring with removable devices to ensure the stability of the mobile home, RV or caravan”.

A construction permit is also necessary even if the structure is not for residential use. For example, if a self- builder uses the mobile home to store building materials or as a site-office during self-build projects. In fact, if there is evidence of regular and long-term use by the owner, the installation will be considered as permanent.

Finally …

Buying any type of property in Italy is a serious investment and often the fulfilment of a dream. Italy real estate, planning and construction laws are complex. We recommend you engage the right team of advisors in place to make your experience successful.

At De Tullio Law Firm, we have over 55 years of expertise managing cross border property law matters throughout Italy.

If you are contemplating a self-build project in Italy and you need any advice, guidance or support, please contact us. We are here to help.

Resident or Domiciled in Italy for tax purposes?

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Are you resident or domiciled in Italy?

In this article, we compare being resident or domiciled in Italy and explore the tax implications.

According to Italian tax law, individual tax residency is pursuant to tests. An individual may find themselves tax resident although they only have relatively minor contacts with Italy. This might be property ownership, frequent visits to the country, or business interests in Italy.

If the Italian tax authorities determine that an individual is tax resident in Italy, the taxpayer is subject to worldwide taxation in Italy.

Tax would therefore be applicable for both income and estate tax purposes. It would include an obligation to report all assets wherever they are in the world. In addition to financial assets and accounts, it requires an individual to report all non-financial assets such as, cars, houses, planes, artworks.

Non-Italian nationals with interests in Italy should pay particular attention to these matters to avoid becoming an unintended Italian tax resident. Because this is a complex topic and, each case is different, we recommend that you seek advice and guidance from your lawyer and accountant.

Applicable tax laws determine whether an individual is resident or domiciled in Italy

Domicile

Domicile is generally determined by an individual’s intention to permanently or indefinitely reside in Italy. Often, an individual will physically have a presence in the country. Domicile is a legal concept. Its rules have been established by way of case law rather than a statutory definition. There are three types of domicile.

Domicile of Origin

This is usually acquired from an individual’s parents.

Elected Domicile

By actually residing in Italy, the individual demonstrates the intention of remaining permanently or indefinitely in Italy. In this way, an individual may acquire an elected domicile – also known as a domicile of choice. Where an individual later gives up elected domicile, domicile of origin is automatically re-acquired.

Domicile of Dependency

This is the domicile a minor holds. When the minor reaches 18 they then acquire elected domicile.

Residence

Domicile takes into account subjective elements of an individual’s intentions. The country where an individual habitually lives determines residence.

The EU test for habitual residence is based on an individual’s interests rather than by a particular duration of residence. In 2014, the European Commission published a practical guide on the Habitual Residence Test.

Fiscal implications

Under Italian tax law, three alternative tests determine an individual’s tax liability in Italy. The tests are registration, residence and domicile. If an individual meets one of the three tests for more than 183 calendar days per annum, this triggers an Italian tax liability.

Registration test

This is a straightforward test. If an individual has registered as a resident with their local municipal office – in the comune where the individual’s residential address is located, they are liable to pay tax in Italy.

Residence test

The residence test comprises two components.

The first component looks at whether physical presence in Italy is regular and continuous, as opposed to sporadic and occasional. If an individual spends time both in Italy and another country, periods of presence outside of Italy are compared with the periods of presence in Italy. This ascertains where presence is prevalent for tax purposes.

The second component of the residence test is more subjective. It is based on an individual’s intention to stay and live in Italy for the foreseeable future. A variety of aspects will determine an individual’s intention to live in Italy on a regular basis. In order to determine intentions, authorities will look at an individual’s conduct, social and personal habits. Authorities will also consider working relationships, family relationships, business and personal activities.

Italian tax liabilities arise if an individual’s physical presence in Italy is prevalent compared to an individual’s presence outside of Italy. For example, a regular and continuous presence in Italy is deemed to exist even if an individual travels abroad on a frequent basis. In other words, if an individual is away from Italy for extended periods of time but then returns as soon as possible. This would denote that an individual maintains Italy as the principal centre of their social and family relations.

Domicile Test

This third test aims to define the place where an individual has their principal centre of interests for business and or social reasons. In this context, ‘interests’ include personal, social, moral, familiar, economic, professional and business interests and relationships.

The domicile test revolves around an individual’s intention to establish and maintain their main centre of relations and interests in Italy.

There are tax implications based on the nature, extent and quality of the connections between an individual and Italy, compared with an individual’s connections with any other country.  As a result, an individual who primarily lives abroad but, maintains their principal centre of interests in Italy satisfies the domicile test.

The domicile test therefore requires careful and comparative evaluation to balance all the facts related to business or personal relationships and connections with Italy.

Case Law regarding the legal concept of domicile

In 2011, the Italian Supreme Court referred to a 1991 decision of the European Court of Justice relating to a non-tax matter. The Italian Supreme Court concluded that, in the case of multiple relations and ties with different countries, where the location of the principal centre of an individual’s interest cannot easily be determined, a prevalent consideration should be given to the relations of a personal nature.

However, more recent decisions suggest that extensive economic interest may outweigh personal connections in establishing an individual’s domicile. Thus, an individual may still be liable to pay tax in Italy.

In a ruling in April 2012, the Italian Supreme Court held that a tennis player living in Monaco qualified for tax residency in Italy. This, despite the family proving that they lived in Monaco. They provided proof through children’s school attendance records, household utility bills, membership of local clubs. The ruling took into consideration the fact that the tennis player maintained significant interests and management positions at several family-owned Italian companies. The individual mainly managed these matters from Italy.

In this case, residence identified the taxpayer’s habitual and regular place of living, while domicile identified the taxpayer’s main center of personal, financial and business interests.

Resident or domiciled. Tax guidance

The Italian tax authorities have issued specific guidance on determining whether individuals are resident or domiciled in Italy. Circular n. 304/E of December 2, 1997. Circular 304 provides instructions for the tax agency’s control and audit activities, which should include the collection and review of the following.

– All information contained in the tax agency data base system.

– Copies of all public documents relating to purchases. This includes real estate, gifts, formation of companies and entities, capital contributions to companies and entities.

– All information on transfers of money from or to foreign countries.

– Information regarding the taxpayer’s family relations in Italy.

– The taxpayer’s economic interests in Italy.

– Information about taxpayer’s intention to remain and live permanently in Italy.

Finally …

De Tullio Law Firm specialises in Italian and international property law. We have over 55 years of helping overseas nationals obtain Italian residence. If you need help or would like to discuss your situation, please get in touch with us.

 

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Accepting Or Renouncing Italian Inheritance

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Inheriting an Italian estate

Under Italian inheritance law, beneficiaries not only inherit a share of the deceased’s estate, they are also liable for any debts. If debts exceed the value of assets, heirs may choose to waive their inheritance. In this article, we discuss renouncing or accepting Italian inheritance.

How does accepting an Italian inheritance work?

The beneficiary can accept to be an heir expressly or tacitly. In either case, the beneficiary must accept within 10 years from the opening of the succession process. 

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When the beneficiary declares to accept the status of heir they need a notarial or a private deed. 

When someone acts in such a way that the acceptance can be implied or inferred it is referred to as Tacit acceptance

The acceptance can also be reserved. This way, the successor reserves the right to accept or renounce an Italian inheritance until such times as they are able to ascertain whether debts or liabilities on the assets exceed the value of the property the beneficiary is inheriting. In this way, the heir is able to discharge themselves from paying any outstanding debts by renouncing an inheritance in favour of creditors and legatees.

Usually, an heir renounces an inheritance if the decedent’s debts exceed the value of the assets. The heir must pay the decedent’s debts up to the value of the property they inherit.

Renouncing an Italian inheritance

For the beneficiary to renounce an Italian inheritance they must make a  statement in front of a Notary Public or at the chancery of the court where they opened the succession procedure (“volontaria giurisdizione” section). The Notary Public or the court clerk then record a renouncement.  The beneficiary must renounce within 10 years of the opening of an Italian succession procedure.

Finally …

At De Tullio Law Firm, we have published a Guide to Italian Inheritance, which we hope you will find useful. 

If you are a beneficiary to an Italian inheritance, it is always advisable to consult a competent independent professional. A lawyer can provide information about debts and charges on inherited assets. A lawyer will also provide advice regarding renouncing or accepting Italian inheritance. This way you can make an informed decision about how to proceed. 

Each case is different so, if you would like to contact us for a free consultation about your Italian inheritance matter, please get in touch.