The Global Property Guide looks at inheritance from two angles: taxation, and what inheritance laws apply to foreigners leaving property in Italy: what restrictions there are and whether making a will is advisable.
Inheritance tax is levied by the state. The tax is imposed on the value of the share of each beneficiary. The rates vary depending on the relationship between the deceased and the beneficiary, as well as the non-taxable threshold amount.
Inheritances of spouses and direct descendants or ascendants are subject to inheritance tax at a rate of 4% on the amount exceeding €1,000,000 per beneficiary.
Transfers to brothers or sisters are taxed at 6% on the amount exceeding €100,000 per beneficiary.
Transfers to relatives up to the fourth degree or relatives-in-law up to the third degree are taxed at 6% on the entire amount of their inheritance.
Any other transfer is taxed at 8% on the entire amount.
Thanks to Ceccon & Associate, Avvocati, Roberto Ceccon and Maria Irene Pasetto
Article 46 of Law. no. 218/1995 on Italian International Private Law (“IIPL”) provides for the application of the national inheritance law of the deceased foreigner at the time of his/her death. The religion, place of residence or domicile of the deceased person has no relevance. The Italian rules on conflict of laws consider the possibility that the national law of a deceased foreigner might defer to the law of another country. Such deferment is effective only if the law of the third State accepts the deferment. If a deferment refers inheritance issues back to Italy, then an Italian judge will apply Italian substantive law.
According to IIPL, where a transaction involves real property, the competent jurisdiction is with the judge of the country where the property is located (Art. 51 of Law No. 218/1995 and Art. 22 of EC Regulation No. 44/2001). Consequently, jurisdiction will be with an Italian judge if:
In the event that Italian law is applicable, all inheritance issues are governed by the rules contained in Book II of the Italian Civil Code (Articles 456 - 809). The jurisdiction for inheritance claims belongs to the judge of the place where the estate was opened (Article 22 of the Italian Code of Civil Procedure), i.e. the place of the last domicile of the deceased person (Article 456 of the Italian Civil Code). Even if the opening of the estate took place outside the Italian Republic, the jurisdiction for inheritance claims belongs to the judge of the Italian venue where the majority of the estate of the deceased was located or, in the absence of real property, to the judge of the city of residence or domicile of the defendant.
In Italian law, some members of the family gain the right to receive a fixed portion of the property of the deceased, even against the will. This legal provision is termed necessary succession. The law reserves a portion of the inheritance to the following people:
Italian law determines which relatives of the deceased have a right to succeed by legitimate succession in the absence of a will, or if the will is invalid. The primary persons involved in legitimate succession are the forced heirs (the spouse, the legitimate and natural children, and the ascendants). Legitimate succession is assigned to the spouse, legitimate and natural descendants, ascendants, collateral and other relatives, according to the following rules:
If Italian law is not applicable, the law of the country where the testator dies applies (lex successionis - Article 46 Law No. 218/1995). The family relationships regulated by the national applicable law determines which relatives have the right to succeed and the prevalence between them.
A foreigner with assets in Italy is advised to make a will, in order to avoid long hazardous proceedings for inheritors and family members. Italian law admits three types of will:
Article 48 of Law No. 218/95 establishes that the will must be considered valid by the law of the State where the will was made, or where the testator was a citizen at the moment of making the will. Alternatively, the will must be considered valid by the law of the State where the deceased had domicile or residence, or where the deceased was present at the time of death.
In the light of the above, it is advisable, and simpler, for a foreigner who is not resident in Italy, to draw up an holograph will, to which the Italian system attributes full effectiveness as much as a public will drawn up by an Italian notary; however the holograph will must comply with the formal requirements provided by Italian Civil Code. The holograph will has to be delivered, preferably in a sealed envelope, to a trustworthy person, who, after the death of the testator, will deliver it to an Italian notary for all the necessary fulfilments (publication, registration, transcription in the competent Real Estate Public Register, payment of inheritance tax). Considering that it is a particularly sensitive document, it is best to deliver the will directly to an Italian public officer, who gives a receipt of deposit containing all the testator’s data.
Pursuant to Law No. 90/387, Italy entered into the Washington Convention of October 26, 1973, providing a uniform law on the form of an international will. As a consequence, if the international will (of an Italian or a foreigner) is handwritten, even by third parties, it is considered formally valid, irrespective of the place where it was drawn up, the nature of the goods, the object of the inheritance, the domicile or residence of the testator, or the language used to write the will.
According to substantive Italian law, every person, during his life, may freely donate property to third parties. The gift, in order to produce transferring effects, must be in the donor’s ownership (i.e. the gift of future goods is null) and the donation has to be done by public notarial act in the presence of two witnesses.
The deceased can freely dispose of only a part of his estate (available portion) by means of a gift, or in a will, since a part (reserved portion) must be inherited by the forced heirs. If the reserved portion is not respected, the forced heirs have at their disposal a specific legal action called “azione di riduzione” that permits them to restore the reserved portion.
In order to establish whether a testator has damaged the rights of forced heirs by making, in his/her lifetime, donations in favour of third parties, or certain forced heirs, it is necessary to calculate the entity of the testator’s ownership at the time of the opening of the estate. The total value of the deceased’s property is calculated, including that donated during his/her lifetime, and any debts are subtracted from the sum. The available portion which the testator can legally dispose of is determined from these calculations. If the testamentary dispositions or donations exceed the portion which the testator can legally dispose of, then each forced heir can ask for an abatement (starting from the last testamentary disposition or donation). The “azione di riduzione” must be filed within ten years from the opening of the estate. Any person who has received donations or legacies in terms of money or property from the deceased during his/her lifetime is obliged to give back such things to the forced heirs (the so called "collazione").
Italian law looks at registered ownership and registered rights to determine the ownership of real property. There are other law concepts, such as possession, which are also protected under certain circumstances. In order to protect one´s rights, the Italian legal system provides for certain instruments that ensure the certainty of juridical subjective situations by making public the facts and juridical acts. Book VI of the Italian Civil Code regulates one of the most important means of publicity, the registration. The registration concerns those acts concerning the ownership of real estate and movable registered goods, and consists of the reproduction of the contents of such acts in special registers of public consultation. The common element of registration is the reproduction of constitutive, modificative, transferance, and/or extinctive effects regarding real estate.
Art. 30 of Law No. 218/1995 provides that the rights of married couples with different nationalities to own property are regulated by the law of common citizenship, or by the law of the place where their married life was prevalently located. A married couple may agree in writing that their ownership of property is regulated by the applicable law of the State where one of them is a citizen, and of which at least one of them is a resident.
If an estate, or part of it, is inherited by a child, or children not of legal age, or others not legally adult, the inheritance must be managed by their parents. If both parents are dead or unable to exercise paternal authority, the tutelary judge designates a guardian to take care of the interests of the minor.
#1 GUISTO | August 31, 2010
if bonds in a fathers name were left in italy and never claimed and they then surface and in the meantime the spouce has died and the husband owner of these such bonds had willed leagally to his sons but was living in england at the time oof death and he had daughters who he didnt will anything too who leaglly ownes the bonds
#2 ELENA | December 21, 2010
I am Asian, my husband is Italian, my nationality is Italian, we bought house in Italy, and invited notary for property notarization, but Italian notary asked my husband signed the paper only without my signature, the reason is that I cannot read Italian, in this case, my right for inherits is affected? my husband has two adult daughts from his ex.marrige, we two have no child, in this case, which percentage of inherits I can get if my husband pass aways before me?
#3 DETULLIO | February 22, 2013
It is always recommended to draft an Italian Will if you have any property in Italy. In this way you can direct more clearly who you want to inherit your property after you die as the Italian Law is designed to protect heirs under the succession procedure. I would thoroughly recommend seeking the advice of an English speaking Italian Lawyer in order to advise you.
#4 JOSEPHINA MAIETTA | December 23, 2014
ok, my mother had us sign paper to sell out property in Italy, turns out my sister who is still there rented our home without our permission for six years. did we ( the children in America just lose our rights to the home and land in Italy) and what happens to the home here
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