If the deceased was resident in Italy, Italian Inheritance Tax (Imposta sulle Successioni) is applied to all the assets worldwide belonging to the deceased.
Otherwise in case of a non resident, the Italian Inheritance Tax rate is calculated on the assets located in Italy. It would be advisable to seek advice from specialized professionals, since Italy grants different international agreements, which prevent the double taxation of estates.
There are different rates which are applied to each heir according to the degree of kinship to the deceased. We can sum up 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 for each beneficiary
- 6% to be paid for transfers to brother and sisters of the deceased, with an exemption of Euro 100,000 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 according to the current Italian inheritance tax regime are calculated over the whole net value of the assets included in the deceased’s estate. 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, money deposited in a bank account.
To sum up, a schematic table with all 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%||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%|
|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 be sure of paying 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.