What is the reduction action in Italian succession?

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To prevent anyone from circumventing the rights of legitimate heirs by gifting all or part of their assets while they are still alive, the law also provides for the possibility of exercising the reduction action against gifts, following the death of the donor (art. 555 of the Italian civil code).

reduction action

In fact, to establish what assets belong to the legitimate heirs, the estate existing at the moment of death (relictum) is added to any gifts (donatum) made while the decedent was still alive. The forced quota is calculated on the total sum (relictum + donatum), and if the remaining assets do not suffice to satisfy the legal rights of the legitimate heirs, they may request the reduction of testamentary dispositions and gifts, starting with the most recent ones. As a result of the reduction action, the assets of the donations must be returned, in whole or in part, to the legitimate heirs, not only by the person who has received the gift, but also from any subsequent buyers of the assets in question.

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Inheritance tax varies by State and in this post we will see how it is calculated in Italy

When a person decides to transfer the ownership of a property to a family member by way of a Will, the former bears the immediate notarial costs of the instrument, while the latter pays any tax related to the act of inheriting a property. Inheritance tax varies by State and we will see how it is calculated in Italy, how it works, how much is paid on inherited assets. We will look at allowances, what percentage is inheritance tax, the mortgage and cadastral taxes and how the cost is calculated.

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What is the reduction action in Italian succession?

Upon the death of a person, the estate of the decedent passes to the heirs. In the absence of a Will, it is the law that establishes who the heirs are and how they divide the inheritance. But even those who make Wills are not always free to decide who inherits their property after death.

In fact, there are some subjects who must legally receive a quota of the inheritance, even if this is against the Will of the deceased. These subjects are called, “legitimate heirs”, or “forced heirs”, precisely because they have the right to receive a share of the inheritance (articles 536 and following of the Italian civil code). They “forced heirs” are the spouse of the deceased (or registered partner), his/her children and, in the absence of children, his/her parents.

Reduction action

The inheritance reserved share for forced heirs varies according to number of the heirs and their kindship.

For example, case A: the decedent leaves the spouse (or registered partner) and one child, each of them has the right to at least one third of the inheritance (therefore in the Will the decedent can freely dispose of the remaining third part of the assets).

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If you die as a resident in Italy, Italian succession law will dictate how your worldwide movable assets (i.e. bank accounts, shareholdings, personal items etc) and Italian immovable assets (i.e. a property) will pass on your death.

If you are resident in another country, Italian law will only dictate how your Italian immovable assets pass on your death.

Whereas, English law, which is based on Common Law, allows you to leave your assets to whomever you choose, Italian law, which is based on Civil Law, does not give you complete testamentary freedom.

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Zes-Aas – 10 years tax-free for pensioners in Italy

Italian government plans 10 years tax-free for pensioners relocating to Sicily, Sardinia or Calabria

10 years tax-free for pensionersYou may have heard that the Italian government is preparing to discuss a proposal to repopulate southern Italy and revitalise its economy? The proposal comes from Alberto Brambilla, pension expert and adviser to Deputy Prime Minister Salvini.

The plan would be to offer ten years tax-free for Italian and foreign retirees relocating their tax residence to Sicily, Sardinia or Calabria. Pensioners would be required to live in participating municipalities for at least six months and one day per year to qualify for the scheme. Sicily, Sardinia and Calabria would be the first three areas of southern Italy to pilot the project. Read more

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