Italy Inheritance and Gift Tax Guide 2026 — Rates (4-8%) and Exemptions

Overview of Italian Inheritance and Gift Tax

Italy's inheritance and gift tax (imposta di successione e donazione) applies to transfers of assets by reason of death (succession) or by gift (donation). The tax is governed by D.Lgs. 346/1990 (Testo Unico dell'Imposta sulle Successioni e Donazioni). The tax is levied on the worldwide assets of the deceased or donor if they were Italian residents at the time of death/donation. For non-residents, the tax applies only to assets located in Italy (primarily real estate and certain Italian financial assets).

The Italian estate tax is an inheritance tax paid by the beneficiaries (not the estate itself, unlike the UK or US systems). Each beneficiary pays tax on their inherited share based on their relationship to the deceased. The rates are progressive but relatively low compared to many other developed countries, though the generous exemptions for close family often result in no tax being due for most estates.

Tax Rates and Exemptions by Relationship (2026)

The tax rate and exemption amount depend entirely on the relationship between the deceased/donor and the beneficiary:

Spouse and Direct Descendants/Ascendants (coniuge, figli, genitori): Rate: 4%. Exemption: €1,000,000 per beneficiary. This means that each child or the surviving spouse can inherit up to €1M completely tax-free. The exemption applies to the total value inherited by each beneficiary from the deceased, not per asset or per inheritance. For estates under €1M per beneficiary, no inheritance tax is due. This generous exemption means the vast majority of Italian estates pay no inheritance tax. For estates exceeding €1M per beneficiary, the 4% rate applies to the excess.

Siblings (fratelli e sorelle): Rate: 6%. Exemption: €100,000 per sibling. The first €100,000 inherited by each sibling is tax-free; the excess is taxed at 6%.

Other Relatives (parenti fino al 4° grado) and Affini (relatives by marriage up to 3° grado): Rate: 6%. No exemption. This category includes: grandparents (if direct line — already covered above), aunts/uncles (2nd degree), nieces/nephews (3rd degree), cousins (4th degree), in-laws up to the 3rd degree (e.g., brother/sister-in-law). All inherit at 6% with no allowance.

All Other Persons (altri soggetti — non-relatives, distant relatives beyond 4th degree): Rate: 8%. No exemption. This includes: friends, unmarried partners (unless registered under Italian civil union law — unione civile, which is treated as spouse), distant cousins, and any unrelated beneficiary.

Disabled Beneficiaries

Beneficiaries who are severely disabled (handicappati gravi under Law 104/1992) are entitled to an additional exemption of €1,500,000 on top of the standard relationship-based exemption. This means, for example, a disabled child can inherit up to €2.5M tax-free (€1M standard + €1.5M disability allowance). The disability must be certified under Italian law.

Special Rules for Specific Assets

Italian Government Bonds and State Securities: Transfers of Italian government bonds (BTP, BOT, CCT, etc.) are exempt from inheritance and gift tax, regardless of the relationship. This exemption also extends to bonds issued by local authorities and certain supranational organisations.

Real Estate: Inherited Italian real estate triggers additional taxes beyond the inheritance tax itself: imposta ipotecaria (mortgage tax) of 2% of the cadastral value and imposta catastale (cadastral tax) of 1% of the cadastral value. However, for transfers to the spouse, direct descendants, and direct ascendants (the 4% category), the mortgage and cadastral taxes are each reduced to a flat €200, making the total additional cost only €400. For other beneficiaries, the full 2% + 1% rates apply.

Family Businesses: Transfers of businesses (aziende) or shares in family companies are exempt from inheritance/gift tax if the beneficiary continues the business activity for at least 5 years after the transfer. The exemption applies to transfers of ongoing business concerns, shareholdings, and quotas in limited companies. This is designed to encourage the succession of family businesses without triggering a tax liability that could force a sale.

Gift Tax Rules

Gifts made during the donor's lifetime (donazioni) are subject to the same rates and exemptions as inheritances. The tax is paid by the beneficiary unless the donor agrees to pay it. Gifts to the spouse, children, and direct line ascendants are tax-free up to €1M per beneficiary. Gifts to siblings are tax-free up to €100,000. Gifts to any other person are taxed immediately at 6% or 8% as applicable, with no exemption.

Gifts that reduce the legitima portio (legittima): Italian law protects the forced heirship rights (legittima) of the spouse and children. Gifts made during the testator's lifetime are brought back into the estate (collazione) for the purpose of calculating the forced shares. If a gift exceeds the portion that the donor could freely dispose of (quota disponibile), the protected heirs may challenge the gift. This is a civil law issue, not a tax issue, but it must be considered in any Italian estate planning.

Trusts and Estate Planning

Italian law recognises trusts (trust interni) governed by the Hague Trust Convention. Trusts are increasingly used for estate planning, asset protection, and tax planning. Tax treatment: A trust established by an Italian resident is subject to inheritance/gift tax when assets are transferred into the trust (at the applicable rate based on the relationship between the settlor and the beneficiaries). During the trust's existence, income generated by trust assets is taxed as follows: Italian-source income at standard rates, foreign-source income through the trust (transparent taxation regime — the trust is treated as tax-transparent if the beneficiaries are identifiable). When assets are distributed to beneficiaries, no further inheritance/gift tax is due (the tax was already paid at the time of contribution).

Cross-border estates (where the deceased was not Italian but left Italian assets, or was Italian but left foreign assets) require careful planning to avoid double taxation. Italy has inheritance tax treaties with only a few countries (France, Greece, Israel, Denmark, Sweden, the US (limited to certain procedural matters)). For most countries, double taxation is mitigated by Italian unilateral foreign tax credit rules (the Italian tax on foreign assets may be reduced by inheritance tax paid abroad on those assets).

Filing Requirements

The inheritance tax return (dichiarazione di successione) must be filed with the Agenzia delle Entrate within 12 months of the date of death. The return includes: details of the deceased, all beneficiaries, all assets worldwide (with values and locations), any debts, and the calculation of tax due. The return is filed electronically through the Agenzia delle Entrate portal. Tax due must be paid within 60 days of the assessment notice (or in instalments if the tax exceeds €10,000). For gifts, the donation must be formalised by a notarial deed (atto notarile) and the tax return (dichiarazione di donazione) must be filed within 30 days if tax is due (though in practice the notary often handles the registration).

FAQs

How much can I inherit tax-free from my parents?

Each child can inherit up to €1,000,000 from each parent completely tax-free (4% rate category with €1M exemption). If the inheritance exceeds €1M per child, the excess is taxed at 4%. For example, if a parent leaves €1.5M to one child, the tax is 4% × €500,000 = €20,000. If the estate is divided equally among three children at €500,000 each, no tax is due on any share. The exemption applies separately to each parent — a child can inherit €1M from each parent tax-free.

Is there an inheritance tax for non-residents?

Non-residents are subject to Italian inheritance tax only on assets located in Italy at the time of death. Italian real estate, Italian bank accounts, and shares in Italian companies are the most common assets caught by Italian inheritance tax for non-residents. The same rates and exemptions apply (4% for spouse/children with €1M exemption, etc.) — the relationship-based rules are universal and do not depend on residence. Many tax treaties reduce or eliminate Italian inheritance tax on certain assets, and the Italian tax may be credited against the home country's inheritance tax under unilateral rules or applicable treaties.

What is the tax on cash gifts?

Cash gifts are treated the same as any other gift under Italian inheritance and gift tax rules. If the donor is an Italian resident and the beneficiary is the spouse or child, no gift tax is due on gifts up to €1M per beneficiary per lifetime (cumulative). Gifts exceeding €1M to the same beneficiary are taxed at 4%. There is no particular advantage or disadvantage to gifting cash versus other assets — the same exemptions and rates apply. However, gifts of cash should be documented (bank transfer or notarial deed) to prove the source and avoid potential tax issues. Cash gifts from non-residents to Italian residents may trigger reporting obligations in Italy (monitoraggio fiscale) if the amount exceeds certain thresholds.

Disclaimer

This guide is for informational purposes only and does not constitute tax advice. Italian inheritance and gift tax law is complex and subject to frequent change. Consult a qualified commercialista or tax advisor for advice specific to your situation. Rates and thresholds for 2026 are based on legislation enacted by June 2026.