Italian Inheritance Tax Calculation

Calculating Your Italian Inheritance Tax

italian inheritance tax

In Italy taxes on inheritance fall into two main categories: estate tax (imposta di successione) and property transfer tax (imposta catastale). The imposta di successione applies to the total net value of the estate and covers both property and non-property assets. The rate of the estate tax varies depending on the relationship between testator and beneficiary. Children and spouses, for example, are always taxed 3% for the entirety of the estate. However, if the estate is worth more than a million euros, the 3% overall tax is added to a tax of 4% on all assets beyond the million euro mark.

For a breakdown of Italian estate tax and how different heirs are taxed, read the following:

  1. Inheritance tax on spouses and children:
    • Below 1 million euros:
      • 3% of the total estate value: inheritance tax for an estate worth 500,000 is 15,000 euros.
    • over 1 million euros:
      • 3% of the total estate value and 4 % of the value exceeding 1 million. Example: inheritance tax for an estate worth 1,500,000 is 45,000 + 20,000 = 65,000 euros.
  2. Inheritance tax of siblings:
    • 3% of the total estate value and 6% of the value exceding 100,000 euros. Example: inheritance tax for an estate worth 1,500,000 is 45,000 + 84,000 = 129,000 euros.
  3. Inheritance tax of other relatives:
    • 9 % of the total estate value. Example: inheritance tax for an estate worth 1,500,000 is 135,000 euros.
  4. Not relatives inheritance tax:
    • 11% of the total estate value. Example: inheritance tax for an estate worth 1,500,000 is 165,000 euros.

The above are broad estimates. There are several special conditions that could considerably reduce the amount of tax to pay. 

The other tax to consider is the imposta catastale. This type of tax is imposed when property located in Italy is transferred to an heir. The imposta catastale taxes at a rate of 3% of the property value on record, or valore catastale, which is typically 30 to 40 percent lower than the market value. If the property is used as the primary residence, the tax has a lower fixed rate of 200 euros. However, for most foreign clients this is not an option as the inherited property would not be utilized as the primary residence.

Call us today to discuss the best ways to manage your inheritance tax in Italy.