Italian inheritance tax: what you need to know

26.1.2023

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The declaration of inheritance is an extremely important requirement for persons who receive real estate or rights in rem, as it is instrumental to the payment of inheritance tax and mandatory for the disposal of assets received mortis causa

Receiving real estate and real property rights as an inheritance entails the obligation to file an inheritance tax declaration and pay the tax

Inheritance tax is payable depending on the type of relationship that binds the heir to the de cuius and to the total value of the devolved assets

Any property transfer likely to result in an increase in the recipient's wealth is considered by our legal system to be potentially subject to tax. In this sense, receiving certain assets as an inheritance may result in the recipient paying a certain amount of tax.
Below, the main aspects of the requirements associated with inheritance are highlighted.

Declaration of inheritance

Succession mortis causa implies, on the heirs, several tax fulfillments. These include the declaration of inheritance.
This is an essential fulfillment for individuals who receive real estate or rights in rem, as it is functional for the payment of inheritance tax and mandatory to dispose of the assets received mortis causa More in detail, it is a mandatory fulfillment of a tax nature that consists in notifying the Internal Revenue Agency of the heirs' takeover of the rights and ownership of the de cuius' assets to determine the taxes due.
Therefore, a prerequisite for the obligation to submit the declaration is not the status of accepting heir but rather that of being called to the estate, at least until the time of relinquishment.
Therefore, within 12 months from the date of the opening of the succession, the obligation to file the declaration falls on those called to the estate (unless they have renounced the inheritance and given notice):

on the heirs
on legatees
on their legal representatives
on the persons entrusted with the administration of the estate
on the receivers of the estate
on executors of wills and trustees

The burden also insists on persons only temporarily placed in possession of the property in the case of the presumed death of the taxpayer or in case of absence.
In addition, it should be clarified that for the case in which more than one person is obligated to make the declaration, the submission of the declaration by only one of them is sufficient to relieve the others of all obligations.
There is an exemption from the obligation to submit the declaration of inheritance in cases where the estate devolved to the spouse and relatives in the direct line of the deceased does not include real estate or real property rights, and the overall amount of the estate does not exceed the threshold of 100 thousand euros. Therefore, in these cases, obligated persons are exempt from filing requirements.
In the case of failure to comply with the obligation to file the inheritance tax return, the taxpayer liable for this obligation may be subject to an administrative penalty of up to 240% of the tax to which he is liable.

Inheritance tax

Inheritance tax is an indirect tax payable to the state by those who receive the inheritance of real estate and real property rights.
However, the tax changes as the relationship between the de cuius, who left the estate, and the heirs' changes.
Specifically, the rates are applied:

Of 4%, for transfers made in favor of the spouse or relatives in the direct line (ascendants and descendants) to be applied on the total net value, exceeding for each beneficiary, the amount of 1 million euros;
By 6%, for transfers in favor of siblings to be applied on the total net value, exceeding for each beneficiary, 100,000 euros;
by 6%, for transfers in favor of other relatives up to the fourth degree, collateral relatives up to the third degree, to be applied on the total net value transferred, without application of any deductible;
by 8%, for transfers in favor of all other persons to be applied on the total net value transferred without application of any deductible.