Inheritance and Gift Tax in Italy for Foreigners: The 2026 Complete Guide
⚠️ Editorial note (June 2026): This article was drafted on 30 June 2026 and reflects the rules in force after Legge di Bilancio 2026 (L. 199/2025) and D.Lgs. 139/2024 (Testo Unico sulle successioni e donazioni). It is not a substitute for case-specific advice. Verify current thresholds with the Agenzia delle Entrate before filing.
- Italian inheritance and gift tax rates range from 4% to 8% depending on the recipient's relationship to the deceased or donor.
- From 1 January 2026, gifts and inheritances have two separate €1 million tax-free thresholds — cumulative gifts no longer eat into your inheritance threshold.
- Foreign residents inheriting Italian assets pay Italian inheritance tax only on the Italian-located assets, not on worldwide estate.
When a UK or US client first sits in my Catania office and asks "what happens to my Italian house when I die?", the answer is rarely what they expect. The default rule for non-residents is a clean territorial principle: Italy taxes only what sits on Italian soil. Add a tax treaty, and even that becomes more nuanced. The 2026 reform just made the planning side more interesting, because for the first time in a decade, gifts and inheritances don't pile up onto a single threshold anymore.
Let me walk you through how it actually works, with current rates, the new thresholds, and the three real-life scenarios I see most often in 2026.
Index
What Is the Italian Inheritance and Gift Tax (IMD)
The Italian imposta sulle successioni e donazioni (IMD, inheritance and gift tax) is a transfer tax — not an income tax — charged on the value of assets that pass from one person to another, either at death (successione) or by gift (donazione).
It is a transmissible, ad valorem tax: it's computed as a percentage of the value transferred, with progressive exemptions based on your family relationship to the deceased or donor. Italian law does not apply a "step-up in basis" the way US estate law does; the tax is levied on the gross market value of the asset at the date of death or gift.
The statutory basis is the D.Lgs. 346/1990 (Testo Unico sulle successioni e donazioni), modified extensively by:
- D.L. 262/2006, art. 2, commi 47-51, which reintroduced the inheritance tax in Italy after decades of near-abrogation;
- L. 232/2016 (Budget Law 2017) and later laws that adjusted the thresholds;
- D.Lgs. 139/2024 (published in Gazzetta Ufficiale n. 231 of 2 October 2024), which introduced self-assessment ("autoliquidazione") from 2025;
- L. 199/2025 (Budget Law 2026), which separated the €1M thresholds for gifts from inheritances and removed the cumulative anti-avoidance rule on donations made in life.
The Agenzia delle Entrate publishes the canonical rates and thresholds in the official portal — see Schede — Aliquote e franchigie.
Territorial Scope: Does Italian Tax Apply to You?
This is the first question I clarify in every consultation, because the answer controls the entire strategy.
| Your status | What is taxed in Italy |
|---|
| Italian tax resident | All worldwide assets, minus treaty relief |
| Non-resident (no codice fiscale for tax purposes) | Only Italian-situs assets: real estate in Italy, Italian-registered shares (other than listed ones held in a broker at the depository), Italian business assets, Italian-registered motor vehicles and boats |
| Non-resident with Italian real estate only | Only that real estate (and any Italian business or vehicles tied to it) |
The territorial principle is straightforward: Italian inheritance tax is a real-estate-and-Italian-assets tax, not a worldwide estate tax for non-residents. This is critically different from the US estate tax (which taxes US citizens' worldwide estate) or the UK's inheritance tax (which taxes worldwide estate for UK-domiciled persons). If you are a non-resident non-domiciled individual (e.g., a US citizen not domiciled in Italy, or a UK citizen not domiciled in Italy), Italian inheritance tax on your non-Italian assets is zero.
The complication arises when you hold Italian real estate or Italian securities — that's when the rates below bite.
💡 Practical note: The territorial rule is why many foreign buyers of Italian holiday homes are surprised: their estate-planning attorney in the US may not have flagged that the Italian house will trigger Italian inheritance tax at the time of death, possibly at the 8% rate if the heirs aren't close family.
The Rates and Thresholds in 2026
The rates and thresholds set by the Agenzia delle Entrate are as follows (current in 2026):
| Recipient relationship to deceased/donor | Rate | Tax-free threshold per beneficiary |
|---|
| Spouse or direct line relatives (children, parents, grandparents, grandchildren) | 4% | €1,000,000 |
| Brothers and sisters | 6% | €100,000 |
| Other relatives up to 4th degree, in-laws up to 3rd degree | 6% | None |
| All other subjects (unrelated persons, cohabiting partners, etc.) | 8% | None |
| Seriously disabled persons (art. 3 c. 3, L. 104/1992) | any | €1,500,000 |
These thresholds and rates are per-beneficiary, per-transfer. They apply symmetrically to inheritances and gifts: the same rates and thresholds now govern both the succession (inheritance) and the donation (gift). The 2026 reform has not altered the rates themselves — but it has disentangled how the thresholds work over time, as explained next.
📌 Source: Agenzia delle Entrate — Imposta di successione: aliquote e franchigie.
Before 2026, the €1 million threshold for children and spouse was cumulative: it had to cover both donations received during the donor's lifetime and the inheritance at death. If your parent had given you €500,000 during life, only €500,000 of your inheritance would be tax-free; above that, the 4% rate kicked in.
This was widely seen as punitive and counter-intuitive. Italian families complained that even modest lifetime gifts could push heirs unexpectedly over the threshold at the time of death, generating large tax bills when bereavement was already painful.
L. 199/2025 (Budget Law 2026) and the implementing reform of the Testo Unico changed this. From 1 January 2026, donations and inheritances are evaluated separately:
- The €1,000,000 threshold for inheritances applies only to inheritances;
- A separate €1,000,000 threshold applies to donations;
- Gifts received during life do not eat into the inheritance threshold anymore.
In practice, this means a child who received €900,000 in lifetime donations can still inherit €1,000,000 tax-free at death. Above each respective threshold, the 4% rate applies as before.
This reform has been welcomed by Italian estate planners and is the single biggest change in Italian succession law in the last decade. For foreign families with mixed-jurisdiction assets, it creates real planning opportunities that weren't there before.
Who Qualifies as a "Family Member" for the Lower Rate
The 4% rate (with €1M threshold) applies to:
- Spouse (including, since 2016, unmarried cohabiting partners registered as "parte di unione civile" — same-sex civil unions — but not simple cohabiting partners);
- Children (legitimate, legitimate, adopted) and their descendants;
- Parents and ascendants;
- Grandchildren and further-line descendants.
The 6% rate (with €100K threshold) applies to brothers and sisters.
The 6% rate with no threshold applies to other relatives up to the 4th degree (aunts, uncles, nieces, nephews, cousins of the same generation or "second cousins") and to in-laws up to the 3rd degree (siblings-in-law, parents-in-law, sons-in-law, daughters-in-law).
The 8% rate (no threshold) applies to everyone else, including unmarried partners ("conviventi di fatto" without a registered civil union) and unrelated persons.
The €1.5M Exemption for Seriously Disabled Beneficiaries
For beneficiaries with severe disabilities recognized under art. 3, comma 3, L. 104/1992 (i.e., needing intensive support for daily life), the threshold is raised to €1,500,000 regardless of their relationship to the deceased. This is an absolute threshold; above €1.5M, the ordinary rate (4%, 6%, or 8% depending on relationship) applies to the surplus.
Anti-Avoidance: "Donations Are Not Cumulative with Inheritances" Anymore
The 2026 reform also removed the rule that forced donations received in life to be added to the inheritance for threshold calculation. Pre-2026, if a parent had given €400,000 to one child in 2018, and €700,000 to the same child in 2024, and the parent died in 2026 with €1,500,000 of estate to be divided, the pre-2026 rule had the €400K + the €700K counted together with the inheritance, almost always triggering 4% tax. Post-reform, that €1.1M of donations is set aside; the child has a fresh €1M threshold against the inheritance.
There are two transitional caveats to flag:
- For inheritances opened before 1 January 2026, the pre-reform cumulative rule still applies.
- For donations made before 1 January 2026 but with the inheritance opened after, the historical cumulative principle still applies to those particular donations (the law is not retrospective in the taxpayer-favourable direction).
This makes the "when did the transfer happen?" question surprisingly important. Documenting dates is critical. It's also why many foreign-Italian families are now revisiting their estate plans — if your last will gives lifetime gifts and still-life inheritances in a structure optimized for the old cumulative rule, the 2026 reform may unlock better structures.
Tax Treaties: When Italy and Your Country Split the Right to Tax
Italy has a wide network of double taxation treaties (Convenzioni contro le doppie imposizioni) that often modify the territorial rule above, particularly for residents of:
- United States (treaty in force since 1990, with protocol amendments);
- United Kingdom (treaty since 1990; partially replaced by post-Brexit arrangements);
- Germany, France, Netherlands, Switzerland, Spain — all have estate/inheritance tax treaties with Italy;
- Most other EU countries and the OECD/G20 bloc generally.
These treaties typically use either:
- The "right to tax at source" principle (Italy taxes the Italian asset, your residence country gives a credit for the Italian tax paid), or
- The "residency" principle (your country of residence taxes worldwide, Italy waives or credits).
The exact mechanism varies. The key treaty articles are normally Article 6 (immovable property) and Article 5 of the protocol. If you have Italian assets and live outside Italy, the treaty between Italy and your country of residence is the first document your tax advisor should read — sometimes it can mean the difference between an 8% Italian tax on the property and a 0% (because the foreign state levies a small credit-based refund).
For US persons specifically, the US-Italy estate tax treaty has historically been favourable on primary residences (often a unified credit-based system) but more restrictive on Italian shares of non-listed companies.
Filings: Dichiarazione di Successione and the 90-Day Rule
Anyone — resident or non-resident — inheriting Italian real estate, Italian business assets, Italian-registered shares (other than listed ones held in a financial intermediary at a depository in Italy) or Italian-registered motor vehicles or boats must file the dichiarazione di successione. The form is filed electronically through the Desktop Telematico or via the Revenue Agency's online service.
Deadline: 12 months from the date of death.
Required documents include:
- Death certificate (translated and apostilled);
- Family status certificate or equivalent proving relationship;
- Cadastral certificate ("visura catastale") for each Italian real estate asset;
- Heirs' identification documents;
- Inventory of assets and liabilities;
- Marriage certificate if applicable.
A non-resident who owns only Italian real estate must also appoint a fiscal representative ("rappresentante fiscale") in Italy, often through a commercialista or avvocato, who files on behalf.
Autoliquidazione: Self-Assessment from 2025
D.Lgs. 139/2024 introduced a major procedural change. From 2025, the taxpayer no longer waits for the Agenzia delle Entrate to issue a liquidazione of the tax due. Instead, the heir (or their representative) computes the tax, fills in the appropriate section of the dichiarazione di successione (Quadro EF), and pays the resulting amount.
The payment must be made within 90 days of filing the dichiarazione di successione and can be paid in installments (rateizzazione) if the tax due exceeds €1,000.
⚠️ Two-year retention rule: The Agenzia delle Entrate can audit the self-assessment within 2 years of filing. Keep all documentation thorough and tidy.
For donations (gift transfers), the system already used self-assessment (Quadro DN of the Modello Redditi), so this just brings successions up to the same standard.
Three Practical Examples (Worked Calculations)
To make the rates and thresholds concrete, here are three scenarios I encounter every month. All values are at 2026 rates.
Example 1: German widow inheriting a Tuscany villa
Anna, a 58-year-old resident of Munich, inherits a Tuscan farmhouse worth €800,000 from her Italian aunt. Her cousin Bruno (the other heir) inherits a separate €400,000 Rome apartment.
- Anna to aunt relationship: niece (4th degree relative) → 6% rate, no threshold.
- Tax due: €800,000 × 6% = €48,000.
For Anna and Bruno, the no-threshold 6% rate applies because the relationship is outside the close family circle.
Example 2: US father leaving €2.5M of Italian assets to his daughter
Robert, a Boston-based US citizen, dies with Italian assets only: a €1,800,000 Lake Como villa and €700,000 of Italian bond portfolio. His sole heir is his daughter Emily.
- Relationship: direct line (parent → daughter) → 4% rate, €1M threshold.
- Succession value: €1,800,000 + €700,000 = €2,500,000.
- Threshold: €1,000,000 (separate from any gifts received).
- Taxable base: €2,500,000 - €1,000,000 = €1,500,000.
- Tax due: €1,500,000 × 4% = €60,000.
Robert's estate planning would benefit from the 2026 reform: if he had given Emily €900,000 during his lifetime (a non-taxable gift under the new €1M threshold), Emily would still have a full fresh €1M threshold against the €2.5M inheritance. Pre-2026, this lifetime gift would have reduced her threshold to €100,000, generating a tax bill of about €52,000.
Example 3: UK couple with an Italian rental property
James and Olivia, a London-based married couple, own a €600,000 rental apartment in Florence. James dies, leaving everything to Olivia.
- Relationship: spouse → 4% rate, €1M threshold.
- Taxable base: €600,000 - €1,000,000 = below threshold; no tax due.
- Tax due: €0.
For UK residents, the UK-Italy estate tax treaty and the UK domicile rules interact, but on the Italian side the spousal exemption covers the whole apartment.
Penalties for Late or Missing Filing
| Situation | Penalty (2026) |
|---|
| Late filing within 1 year | €250 fixed + interest on late tax |
| Late filing beyond 1 year | €500 to €2,000 |
| Under-declared value (omission of assets) | 6% to 30% of unpaid tax + interest |
| Fraudulent declaration | 30% to 60% of unpaid tax + criminal prosecution (rare) |
| Failure to file at all | Treated as omitted declaration: severe penalties |
Practical advice: always file, even if you believe no tax is due. The dichiarazione di successione is also the official document that transfers property title in Italy — without it, the heir cannot register the inherited real estate in their name at the Conservatoria dei Registri Immobiliari.
Common Mistakes Foreigners Make
- Treating the Italian apartment as "covered" by the UK/US estate tax and forgetting that Italy independently levies its own tax on Italian real estate. The foreign estate tax and the Italian inheritance tax are separate.
- Confusing Italian succession tax with the "imposta di registro" (the registration tax on property transfers). The dichiarazione di successione is the succession tax filing; the voltura catastale is the property-registration step that follows it.
- Forgetting the dichiarazione di successione even when no tax is due. The Italian Conservatoria will not accept property-registration requests without it.
- Ignoring the fiscal representative requirement for non-residents, leading to filings rejected by the Agenzia delle Entrate.
- Assuming the codice fiscale is optional for an Italian heir or donee. The dichiarazione di successione requires an Italian codice fiscale for each heir.
- Notary ignorance: in Italy, wills are normally deposited with a notary ("pubblico ufficiale") who registers them. Foreign wills (e.g., drafted under English common law) must be republished through an Italian court procedure.
- Trust structures: many foreign common-law trusts are not recognized under Italian inheritance law and may trigger higher taxation. Always check with an avvocato specializing in cross-border succession before setting up a trust with Italian beneficiaries.
Frequently Asked Questions (FAQ)
Are unmarried cohabiting partners (conviventi di fatto) covered?
Unmarried cohabiting partners are not in the 4% category. They fall under the 8% rate with no threshold. The 2016 Legge Cirinnà established a separate regime for registered civil unions (unioni civili), which are treated the same as marriage for inheritance purposes — but cohabitation simpliciter is not enough.
What if my country has no estate tax treaty with Italy?
Most OECD countries have one; the few that don't (including most non-EU Mediterranean and Andean countries) follow the standard Italian territorial rule for non-residents: Italian tax on Italian-situs assets only, in full at the rate applicable to the relationship.
Is Italian real estate always Italian-situs?
Yes — under Article 6 of most Italian estate tax treaties, immovable property is taxable where it is situated. Italian real estate is therefore taxable in Italy regardless of where the deceased was resident.
What's the difference between inheritance and gift tax in Italy?
Inheritance tax ("imposta di successione") is paid by heirs on assets received at death. Gift tax ("imposta di donazione") is paid by donees on assets received during the donor's lifetime. Rates and thresholds are the same. The 2026 reform separated the thresholds so that a gift received in life does not reduce the inheritance threshold.
Can I pay the tax in installments?
Yes, if the tax due exceeds €1,000, you can request rateizzazione (typically 4-8 quarterly installments) through the PagoPA portal.
Do I need an Italian notary?
For real estate inheritance, you typically work with an Italian notaio (notary) for the voltura (transfer of property title). The dichiarazione di successione itself can be filed by the heirs directly through the Agenzia delle Entrate's online portal, or through a commercialista / avvocato acting as fiscal representative.
How is the property value determined?
Italian real estate is valued at the greater of (a) the cadastral value revalued (using a specific multiplier) and (b) the market value declared. For inheritances, the market value used is the valore venale in comune commercio as of the date of death. Several practical valuation tools exist; the technical expertise of a commercialista or perito is normally wise.
What about a UK domicile change post-Brexit?
After Brexit, UK inheritance tax still applies based on domicile (a common-law concept), not residence. A non-UK-domiciled person who owns Italian assets but lives in Italy is generally not subject to UK inheritance tax on those Italian assets. Italy, by contrast, taxes only Italian-situs assets for non-residents. The interaction can sometimes mean a double non-taxation, which treaty law tries to prevent, but which still occurs with sophisticated planning.
How to Get Case-Specific Advice
Italian inheritance tax is not a "copy-paste" matter — it intersects with your citizenship(s), domicile, family structure, marital property regime, and Italian real estate location. A bilingual commercialista + avvocato team is typically the right setup. I regularly assist clients from the UK, US, Germany, France, and the Netherlands with cross-border estate planning involving Italian assets.
You can book a 30-minute consultation through our office in Catania or remotely via video call. For complex multi-jurisdiction estates, we coordinate with your home-country attorney or chartered accountant.
Giovanni Emmi|July 21, 2026
