Italian inheritance and gift tax after the reform of 2024

A light tax with a long history

By European standards Italy taxes inheritances within the family lightly. After its abolition in 2001 the tax was reintroduced in 2006 with high allowances and low rates, in a structure that has remained essentially unchanged.¹ The legal basis is still the Consolidated Act on Inheritance and Gift Tax (Testo unico delle disposizioni concernenti l'imposta sulle successioni e donazioni), Legislative Decree No 346 of 31 October 1990 (TUS), as amended many times. Art. 1 defines the scope of the tax as transfers of property by succession, by gift or otherwise free of charge, "compresi i trasferimenti derivanti da trust e da altri vincoli di destinazione".² Inheritance tax and gift tax follow the same rates and allowances, so that a gift during lifetime is not taxed more heavily than an inheritance, although the allowance of each beneficiary is reduced by earlier gifts from the same person.

The rates and allowances depend on the relationship between the deceased or donor and the beneficiary. Spouses and relatives in the direct line pay 4 per cent on the value exceeding EUR 1 million per beneficiary. Brothers and sisters pay 6 per cent on the value exceeding EUR 100,000 per beneficiary. Other relatives up to the fourth degree and relatives by marriage up to the third degree pay 6 per cent without an allowance. All other persons pay 8 per cent, also without an allowance. Severely disabled beneficiaries have an allowance of EUR 1.5 million. On real estate the hypothecary and cadastral taxes of 2 and 1 per cent of the cadastral value are added. They are reduced to fixed amounts of EUR 200 each if the property qualifies as a first home for one of the heirs.³

In figures. Italian inheritance and gift tax: 4 per cent above EUR 1 million per beneficiary for the spouse and relatives in the direct line; 6 per cent above EUR 100,000 for siblings; 6 per cent without allowance for other relatives; 8 per cent for unrelated persons; EUR 1.5 million allowance for severely disabled beneficiaries; hypothecary and cadastral taxes of 2 and 1 per cent on real estate.⁴ Since 1 January 2025 the heirs calculate and pay the tax themselves within 90 days of the deadline for the succession return, which is normally twelve months after the death.⁵

Territorial scope and the residence of the deceased

Art. 2 TUS determines which assets are taxed. If the deceased or donor was resident in Italy, the tax covers all transferred assets wherever they are situated. If he or she was not resident in Italy at the opening of the succession, the tax applies only to assets existing in Italian territory. Assets registered in Italian public registers and shares in companies that have their registered office or place of administration in Italy are deemed to be situated in Italy.⁶ For a family with links to Ticino the consequence is clear. If the head of the family dies resident in Milan, the Lugano bank account, the Swiss company and the house in Morcote all fall into the Italian taxable estate. If he or she dies resident in Lugano, Italy taxes only the Italian assets, including the shares in the Italian family company and real estate in Italy, while the Swiss assets remain outside the Italian tax.

The residence of the deceased is therefore the decisive connecting factor, and disputes about it are common. The Italian authorities may argue that a person who formally moved to Lugano remained resident in Italy because the family, the business or the habitual abode stayed there. The criteria for tax residence of natural persons, which were redefined with effect from 2024, are examined in the section on residence below. In inheritance tax disputes the heirs will in practice need to document the effective departure, although they often have only limited records about the life of the deceased in the last years before death.⁷

Notes

1. Wikipedia (Italian), "Imposta sulle successioni e donazioni", https://it.wikipedia.org/wiki/Imposta_sulle_successioni_e_donazioni (consulted 5 October 2026, used as a last resort): abolished by Legge 18 ottobre 2001, n. 383, and "ripristinata nel 2006 ... con il decreto-legge n. 262/2006, convertito con la legge n. 286/2006" (Art. 2). ↩
2. Decreto legislativo 31 ottobre 1990, n. 346, Art. 1, consolidated text at Bosetti & Gatti, https://www.bosettiegatti.eu/INFO/NORME/statali/1990_0346.htm (consulted 5 October 2026). ↩
3. NotaiOnline, "Imposta di successione 2026: aliquote e franchigie", updated 24 September 2026, https://notaionline.it/guida/imposta-successione-2026-aliquote-franchigie/ (consulted 5 October 2026). ↩
4. NotaiOnline (above). The allowance applies per beneficiary. ↩
5. NotaiOnline (above): payment "entro 90 giorni dal termine di presentazione della dichiarazione". Teleborsa, "Guida al passaggio generazionale" (above), on the self-assessment and F24 code 1539. ↩
6. D.Lgs. 346/1990, Art. 2, at Bosetti & Gatti (above). ↩
7. Allocation of the burden of proof in inheritance tax disputes on the residence of the deceased. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.