What is inheritance tax and how does it work?
Everything you need to know about taxes on wealth inheritance in Italy.
5 min read
The loss of a loved one is a time of grief and remembrance for family members. At the same time, practical and bureaucratic matters also need to be addressed—including thinking about inheritance tax. To make things easier, we’ve put together a guide to help you understand the ins and outs of inheritance tax in Italy. Let's take a look.After a person’s death, Italian law specifies the opening of the succession process. In short, this represents the transfer to the heirs of all legal transactions of a patrimonial nature—meaning any transaction subject to economic evaluation.The Italian Civil Code breaks down inheritances into two categories:Inheritance tax is calculated based on the value and status of the estate. The Italian Revenue Agency determines the tax owed by subtracting the total deductible inheritance liabilities and other tax deductions from the overall value of the estate assets.First, the total estate value needs to be calculated. This includes the value of all real estate, immovable property rights, securities, movable property, holdings, credit claims, etc.—in other words, the total value of all the deceased person’s property. From this amount, the liabilities of the deceased person are subtracted—including any debts, mortgages, or medical expenses incurred on his or her behalf by the heirs in the last six months of life. The difference represents the asset value on which the taxes are calculated.In the case of properties inherited with full ownership, the taxable base used to calculate inheritance tax is the cadastral income (rendita catastale), revalued by 5% and multiplied by one of these figures:Inheritance tax must be paid within 60 days of the date on which the tax assessment is served. If an heir doesn’t pay the inheritance tax by the 60-day deadline, they’ll be charged penalties and interest on the overdue payment. The tax can also be paid in installments if the amount exceeds €1,000. In this case:In a world where technology ought to simplify our daily lives, bureaucracy can get in the way. So isn’t it time to say goodbye to paperwork and queues at the branch, and say hello to N26—your digital bank? Make online payments the quick and easy way right from your smartphone. Pay for phone top-ups, PagoPA payments, postal payment slips, MAV or RAV payments—even car taxes. Want to learn more? Sign up in minutes and discover the top features N26 has to offer. Isn’t it time to start managing your payments in Italy the hassle-free way?
The inheritance declaration and inheritance tax
- Testamentary (with a will)
- Legitimate (without a will)
- Real estate, such as buildings and land
- Liquidity, including bank accounts, savings accounts, or securities
- Companies or firms
- Credit claims
- Goods, such as money, jewelry, and furniture (calculated at 10% of the overall net taxable value)
- If the estate is transferred to the spouse and direct relatives—i.e. children, grandchildren, or parents—of the deceased person
- If the estate doesn’t exceed €100,000 in value
- If the estate doesn’t include real estate or immovable property rights
- Heirs and legatees, or their legal representatives
- Those who are temporarily in possession of the assets of the absentee
- Administrators of the estate and trustees of the unclaimed estate
- Executors of the will
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Try the budgeting calculatorHow inheritance tax is calculated—and how much it costs
- 110 for the primary residential property (prima casa)
- 120 for buildings in cadastral groups A and C—except categories A/10 and C/1
- 140 for buildings in cadastral group B
- 60 for buildings in cadastral groups A/10 (group and private offices) and D
- 40.80 for buildings in cadastral groups C/1 (shops and workshops) and E
- 4% for the spouse or direct relatives (parents, children, grandchildren), applied on the net value for each beneficiary on amounts that exceed €1 million
- 6% for siblings, applied on the net value for each beneficiary on amounts that exceed €100,000
- 6% for other relatives up to the fourth degree of kinship, applied to the overall net value with no exemption limits
- 8%, for all other persons, applied on the overall net value with no exemption limits
When to pay inheritance tax
- At least 20% of the amount must be paid within the 60-day deadline, starting from the tax assessment notification.
- The remainder must be paid in eight or 12 quarterly installments, depending on the amount. The interest on these installments is calculated starting from the first day on which the initial sum is paid. Installments are due on the last day of each quarter.
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