Inheritance Tax Italy

Key Facts at a Glance

• Italian inheritance tax ranges from just 4% to 8% depending on kinship, with a €1,000,000 tax-free allowance per beneficiary for spouses and children — among the most favourable regimes in Europe
• Heirs must file the “Dichiarazione di Successione” within 12 months of death and self-assess and pay the tax themselves within 90 days of that deadline
• Cross-border estates can be taxed in more than one country; RAMPF/EICHNER coordinates Italian and foreign requirements to secure treaty credits and prevent double taxation

Every year, thousands of foreign nationals inherit property, bank accounts or business interests located in Italy — often a holiday home purchased decades earlier, or assets belonging to relatives who emigrated abroad. For heirs unfamiliar with the Italian system, the first question is almost always the same: how much inheritance tax will I have to pay in Italy? The good news is that Italy’s imposta sulle successioni is comparatively moderate. The less good news is that the procedure is strict, deadline-driven, and, for cross-border estates, can interact with tax obligations in the heir’s own country of residence.

How Much Is Inheritance Tax in Italy?

Italian inheritance tax (imposta sulle successioni) is not levied on the estate as a whole. Instead, each beneficiary is taxed individually, at a rate and allowance determined by their degree of kinship to the deceased. This individual, per-beneficiary approach often means that close relatives inherit substantial sums without paying any tax at all.

Crucially, the allowance is a threshold, not a cliff-edge: tax is due only on the portion of the inheritance that exceeds it.

Two Separate Tax-Free Thresholds

Gifts and inheritances are now assessed against two independent allowances, so a spouse or child who has already used their €1 million gift-tax allowance during the deceased’s lifetime can, in principle, still inherit up to a further €1 million tax-free — effectively up to €2 million tax-free per qualifying beneficiary when lifetime gifts and inheritance are combined. This change has made lifetime transfers a considerably more attractive planning tool for families with Italian assets, and is a point worth reviewing with a lawyer well before, rather than after, a death occurs.

Filing the Dichiarazione di Successione

Unike some jurisdictions where the estate itself settles tax before distribution, in Italy the heirs are personally responsible for reporting and paying. The key steps are:

• Obtain an Italian codice fiscale (tax identification number) for every heir, if they do not already hold one.
• File the Dichiarazione di Successione electronically with the Agenzia delle Entrate within 12 months of the date of death.
• self-assess the tax due directly in the filing, rather than waiting for an assessment from the tax office.
• Pay the assessed tax within 90 days of the filing deadline; installment payment is available on request.
• Where real estate is involved, the filing also triggers the automatic update (voltura) of the land registry in the heirs’ names.

Mising the 12-month deadline is not merely a formality: transfer of the property into the heirs’ names cannot be completed until the declaration is filed and the tax settled, and late filing exposes heirs to administrative penalties that increase the longer the delay continues. Because the declaration also requires a full and accurate valuation of Italian and, where relevant, worldwide assets, we generally recommend engaging local counsel as soon as possible after a death, rather than close to the deadline.

Cross-Border Estates: Avoiding Double Taxation

For heirs who live outside Italy, the first question is one of territorial scope. If the deceased was resident in Italy at the time of death, Italian inheritance tax applies to their worldwide estate. If the deceased was resident abroad, Italy generally taxes only the assets physically located in Italy — typically real estate, Italian bank accounts and Italian-registered shareholdings.

This territorial approach can still lead to double taxation, because many other countries — Germany among them — apply a worldwide taxation principle of their own, taxing an inheritance in full wherever the heir or the deceased is domiciled. Where inheritance tax has genuinely been paid on the same assets in both Italy and the heir’s home country, Article 26 of the Italian consolidated inheritance and gift tax code allows a credit for the foreign tax paid, up to the portion of Italian tax attributable to those same assets, unless a specific double taxation treaty provides otherwise. Whether a treaty applies, and how the credit is calculated, depends heavily on the countries involved and the residence and domicile of both the deceased and the heirs — this is precisely the kind of question that requires advice on both sides of the border, which is where our combined Italian-German practice adds the most value.

How RAMPF/EICHNER Can Help

As a bi-national firm with qualified lawyers in both Italy and Germany, RAMPF/EICHNER regularly advises heirs who are unfamiliar with the Italian system and need a single point of contact for the entire succession. We assist with obtaining a codice fiscale, gathering and valuing estate assets, preparing and filing the Dichiarazione di Successione within the statutory deadline, calculating and, where applicable, minimising the tax due, and coordinating the position with tax authorities abroad to secure any available treaty credit. If you have inherited, or expect to inherit, assets located in Italy, we recommend seeking advice early — the 12-month deadline runs from the date of death, not from the date you first contact a lawyer.

Frequently Asked Questions