Inheritance tax in Italy is charged at 4% to 8%.
The exact rate applied depends on the heir’s relationship to the deceased: close relatives like children and spouses benefit from lower rates, while distant relatives face higher rates.
For foreigners, expats, residents, and non-residents, exposure is further affected by the deceased’s Italian tax residency and the location of assets.
Este artículo trata:
- How does inheritance tax work in Italy?
- How much inheritance tax do you pay in Italy?
- What is the inheritance tax threshold in Italy?
- How to avoid inheritance tax in Italy for foreigners?
Principales conclusiones:
- Italy’s inheritance tax rates are low compared with most European countries.
- Spouses and children benefit from a €1 million tax-free allowance each.
- Non-residents are usually taxed only on Italian-situs assets.
- Residency planning can significantly reduce inheritance tax exposure.
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La información contenida en este artículo es meramente orientativa. No constituye asesoramiento financiero, jurídico o fiscal, ni una recomendación o solicitud de inversión. Algunos hechos pueden haber cambiado desde el momento de su redacción.
What are the inheritance tax rules in Italy?
Under Legislative Decree No. 346/1990, Italian inheritance tax is determined by the beneficiary’s relationship to the deceased and by whether the deceased was tax-resident in Italy at the time of death.
If the deceased was tax resident in Italy, inheritance tax applies to worldwide assets, including foreign property and overseas investments.
If the deceased was not tax resident in Italy, inheritance tax generally applies only to Italian-situs assets, such as Italian real estate or Italian bank accounts.
IHT in Italy is assessed per beneficiary, not on the estate as a whole, which often reduces the overall tax burden for families.
What is the inheritance tax rate in Italy?
Inheritance tax rates in Italy range from 4 percent to 8 percent. Spouses and direct descendants are taxed at 4 percent, but only on amounts exceeding a generous tax-free threshold.
Siblings are taxed at 6 percent, with a much smaller exemption. More distant relatives and non-family beneficiaries face 6 percent to 8 percent inheritance tax, often with no exemption at all.
Compared with countries like the UK or France, Italy’s inheritance tax rates are considered low.
What is the most you can inherit without paying taxes?
A spouse or child can inherit up to €1 million tax free per beneficiary under Italian inheritance tax rules.
Siblings can inherit up to €100,000 tax free each.
Other relatives and non-family beneficiaries generally receive no tax-free allowance.
These exemptions apply per beneficiary rather than per estate, which can substantially reduce inheritance tax where assets are split among multiple heirs.
Is there a way to avoid inheritance tax?
Yes, Italian IHT can often be legally reduced or eliminated with proper planning.
The most effective methods include distributing assets among multiple heirs to maximize exemptions, holding qualifying assets outside the Italian tax net, and ensuring the deceased is not Italian tax resident at death when possible.
Because Italy taxes beneficiaries individually, structuring inheritance across family members can materially reduce total tax exposure.
How to avoid inheritance tax on overseas property?
You avoid Italian inheritance tax on overseas property by ensuring the deceased was not tax resident in Italy at the time of death.
Foreigners who maintain non-Italian tax residency and hold property abroad are generally outside the Italian inheritance tax net for those assets.
This is particularly relevant for expats with real estate in the US, UK, or other jurisdictions.
If the deceased was Italian tax resident, overseas property becomes taxable in Italy, making residency planning critical for high-net-worth individuals.
How to avoid tax in Italy for foreigners?
Foreigners can reduce or avoid Italian inheritance tax by carefully managing tax residency, asset location, and ownership structure.
Holding investments and property outside Italy, using foreign trusts or holding vehicles where appropriate, and aligning inheritance planning with home-country rules can all reduce Italian tax exposure.
Italy’s flat-tax regime for new residents does not automatically eliminate IHT, so planning must be done separately.
How to avoid double taxation in Italy?
You can avoid double taxation in Italy by using treaties, foreign tax credits, and careful residency planning.
Double taxation occurs when the same income or assets are taxed both in Italy and another country. Key strategies include:
1. Claiming foreign tax credits: Taxes paid abroad on income or capital gains can often be credited against Italian tax liabilities.
2. Leveraging treaty provisions: Many treaties reduce or eliminate Italian tax on certain types of income, such as pensions, dividends, or real estate proceeds.
3. Careful residency planning: Determining tax residency under Italian rules and treaty definitions can prevent being taxed as a full Italian resident if you primarily live abroad.
4. Structuring cross-border inheritances or gifts: Using legal structures and professional advice can ensure assets are taxed in only one jurisdiction whenever possible.
Professional advice is strongly recommended, as rules vary by country and type of income or asset.
Conclusion
Italy’s inheritance tax system is relatively mild, but outcomes vary sharply depending on residency, family relationship, and where assets are located.
For foreigners and expats, the difference between being Italian tax resident or non-resident at death is often decisive.
With low headline rates, generous exemptions for close family, and per-beneficiary taxation, careful structuring and residency planning can substantially limit or even eliminate Italian inheritance tax exposure when handled in advance.
Preguntas frecuentes
What is the 7% rule in Italy?
The 7 percent rule refers to Italy’s optional flat tax regime for foreign-source income, available mainly to foreign retirees who move to certain southern Italian municipalities.
Under this regime, qualifying individuals can pay a flat 7 percent tax on all foreign income, instead of normal progressive Italian income tax rates, for up to 10 years.
This rule does not apply to inheritance tax, which is governed separately and uses fixed rates of 4 percent, 6 percent, or 8 percent depending on the beneficiary.
What is the 70% tax rule in Italy?
The 70% rule refers to the old lavoratori impatriati tax scheme, under which 70% of qualifying employment or self-employment income was exempt from Italian income tax.
This rule does not apply to inheritance tax — it was an income tax incentive for foreigners relocating to Italy, and only affected earnings, not estates or inheritances.
What is the 30% rule in Italy?
The 30% rule means that qualifying employees or self-employed individuals relocating to Italy were taxed on only 30% of their Italian-source income for five years.
In some southern regions (Abruzzo, Molise, Campania, Apulia, Basilicata, Calabria, Sardinia, or Sicily), the taxable portion could be reduced to 10%.
This rule applies to income tax and is not related to inheritance tax.
What is the 100k tax rule in Italy?
The €100,000 rule applies to siblings, who may inherit up to €100,000 each before inheritance tax applies.
Amounts above this threshold are taxed at 6 percent.
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Adam es un autor reconocido internacionalmente en temas financieros, con más de 830 millones de respuestas en Quora, un libro muy vendido en Amazon y colaborador de Forbes.
