Italian Inheritance Tax: Rates, Calculation and Payment — A Guide for Foreign Heirs

When inheriting assets in Italy, foreign heirs must understand not only the legal process for accepting or managing the inheritance, but also the Italian tax obligations that arise from it. Italian inheritance tax (imposta di successione) applies to the transfer of ownership or other rights over both movable and immovable assets following the death of their owner, and the tax must be assessed and paid through a formal procedure — the succession declaration — submitted to the Italian Revenue Agency (Agenzia delle Entrate).

This guide explains the Italian inheritance tax rates and exemptions, how the taxable base is calculated, how the succession declaration works, and the consequences of late or omitted filing. For a complete overview of Italian succession law including the rules on accepting or renouncing an inheritance, see our article on Italian inheritance and succession law for foreign heirs. For direct legal assistance, see our page on Italian inheritance law for international clients.

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Italian Inheritance Tax Rates and Exemptions

Italian inheritance tax is governed by Legislative Decree No. 346 of 31 October 1990 and applies at different rates depending on the relationship between the deceased and each beneficiary. The rates and exemptions apply individually to each beneficiary — they are not calculated on the total value of the estate.

• Spouse and direct-line relatives (children, grandchildren, parents, grandparents): rate of 4%, with a personal exemption of €1,000,000 per beneficiary. Inheritance tax is only payable on the portion of the inheritance received that exceeds €1,000,000. Below this threshold, no inheritance tax is due
• Brothers and sisters: rate of 6%, with a personal exemption of €100,000 per beneficiary
• Other relatives up to the fourth degree, and direct-line affines and collateral affines up to the third degree: rate of 6%, with no exemption
• All other persons (including unrelated beneficiaries): rate of 8%, with no exemption
• Severely disabled heirs: an enhanced personal exemption of €1,500,000 applies regardless of the degree of relationship

It is important to note that these rates also apply to donations made during the deceased’s lifetime — Italian law treats gifts and inheritances within the same fiscal framework for the purpose of applying rates and exemptions.

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Assets Excluded from Inheritance Tax

Certain categories of assets are expressly excluded from the taxable estate and do not contribute to the calculation of inheritance tax:

• Italian government bonds (titoli del debito pubblico) and bonds issued by other EU member states
• Business enterprises, business divisions or controlling shareholdings in companies, where the direct-line relatives or spouse of the deceased continue to carry on the business activity for at least five years from the date of opening of the succession
• Severance indemnities (TFR) and benefits paid by supplementary pension funds
• Vehicles registered in the Public Automobile Register (Pubblico Registro Automobilistico)
• Life insurance proceeds

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How the Taxable Base Is Calculated

The taxable base for inheritance tax is the net value of the estate — that is, the total value of the active hereditary assets minus the deductible liabilities and charges.

Active Hereditary Assets

The active hereditary mass includes all assets belonging to the deceased at the date of death, including:

• Real estate and real property rights (usufruct, right of use, right of habitation)
• Businesses, shares and bonds, company stakes
• Annuities, pensions and receivables
• Cash, jewellery and household contents — included in the taxable base at an amount equal to 10% of the global net taxable value of the estate, even if not separately declared or declared for a lower amount, unless an inventory establishes a different figure

Deductible Liabilities and Charges

The following may be deducted from the gross estate value:

• The deceased’s outstanding debts, substantiated by documentary evidence
• Medical expenses incurred in the last six months of life
• Funeral expenses, up to a maximum deductible amount of €1,032.91
• Taxes paid abroad in relation to the same succession assets, where a double taxation issue arises

Valuation of Real Estate for Tax Purposes

For inherited real estate held in full ownership, the taxable base for inheritance tax purposes is not the market value but a cadastral value calculated by multiplying the cadastral income (rendita catastale), revalued by 5%, by one of the following coefficients depending on the cadastral category:

• 110 — for the primary residence (abitazione principale)
• 120 — for buildings in cadastral groups A and C (excluding A/10 and C/1)
• 140 — for buildings in cadastral group B
• 60 — for buildings in categories A/10 (offices and private studies) and D
• 40.80 — for buildings in categories C/1 (shops and workshops) and E

For non-building land, the taxable value is calculated by multiplying the cadastral income, already revalued by 25%, by a coefficient of 90.

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Mortgage and Cadastral Taxes on Inherited Real Estate

Where the inherited estate includes real estate or real property rights, in addition to inheritance tax, the following taxes are also due:

• Mortgage tax (imposta ipotecaria): 2% of the cadastral value of the real estate. The minimum amount is €200
• Cadastral tax (imposta catastale): 1% of the cadastral value. The minimum amount is €200

Where the heir is entitled to the primary residence (prima casa) exemption — because they intend to establish or already have their main residence in the inherited property — both the mortgage tax and the cadastral tax are reduced to a fixed amount of €200 each. The inheritance tax, however, remains due at the standard rates and is not affected by the primary residence exemption.

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The Succession Declaration: Who Must File and When

Under Articles 28 and 29 of Legislative Decree No. 346 of 1990, the succession declaration (dichiarazione di successione) must be submitted to the Italian Revenue Agency within one year from the date of opening of the succession — which in most cases coincides with the date of death of the deceased.

The following persons are obliged to submit the declaration:

• Heirs and those called to the inheritance
• Legatees
• Administrators of the inheritance
• Curators of the hereditary estate
• Executors of the will
• Trustees, where applicable

Where multiple persons are obliged, it is sufficient for one of them to submit the declaration on behalf of all.

Exemptions from the Obligation to File

The succession declaration is not required where all three of the following conditions are simultaneously met:

• The inheritance passes entirely to the deceased’s spouse or direct-line relatives
• The total value of the active hereditary estate does not exceed €100,000
• The estate does not include any real estate or real property rights

Additionally, persons who formally renounce the inheritance or the legacy before the expiry of the deadline for filing the declaration are not required to file.

Where to File

The declaration must be submitted to the Revenue Agency office (Ufficio dell’Agenzia delle Entrate) with jurisdiction over the municipality of the deceased’s last residence in Italy. Where the deceased was resident abroad at the time of death, the competent office is the one with jurisdiction over the deceased’s last Italian residence. If no last Italian residence is known, the competent office is the Provincial Directorate II of Rome — Territorial Office Rome 6, as established by Article 15, paragraph 2 of Law No. 383 of 2001.

Since October 2006, electronic submission of the succession declaration has been mandatory for most cases. The declaration can be submitted through an authorised intermediary — such as an Italian lawyer or accountant — or directly by the obligated person using the Revenue Agency’s online platform.

Within 30 Days of Filing

Where the estate includes real estate, within 30 days of submitting the succession declaration, the heir must also submit a request for the transfer of real estate registration to the Provincial Offices — Territory of the Revenue Agency (Uffici Provinciali – Territorio).

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How Inheritance Tax Is Paid

Following the submission of the succession declaration, the Revenue Agency issues a formal assessment notice (avviso di liquidazione) calculating the tax due. Payment is made using the F24 form, which is attached to the assessment notice, at the Revenue Agency — Collection, at a bank or at a post office.

Instalment payment is available:

• At least 20% of the total amount must be paid within 60 days of notification of the assessment notice
• The remainder must be paid in 8 quarterly instalments (or 12 instalments where the amount exceeds €20,000), with interest accruing from the first day after the initial payment

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Supplementary or Substitute Declarations

Under Article 28, paragraph 6 of Legislative Decree No. 346 of 1990, if after the initial filing an event occurs that changes the devolution of the inheritance — for example, a previously unknown will comes to light, or a legatee renounces — or leads to the application of a higher tax, the obligated persons must file a supplementary or substitute succession declaration.

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Penalties for Late or Omitted Filing

The Italian tax system imposes significant penalties for failure to file or for late filing of the succession declaration.

Omitted Declaration

Under Article 50 of Legislative Decree No. 346 of 1990, failure to file the succession declaration results in an administrative penalty ranging from 120% to 240% of the tax assessed. Where no tax is due, an administrative fine of between €250 and €1,000 applies.

Late Filing

Where the declaration is submitted late but within 30 days of the deadline, the penalty is reduced to a range of 60% to 120% of the assessed tax. Voluntary regularisation under the ravvedimento operoso procedure (Article 13, paragraph 1 of Legislative Decree No. 472 of 1990) further reduces penalties:

• Delay not exceeding 90 days: penalty reduced to 1/10 of the minimum
• Regularisation within 90 days of the deadline: 1/9 of the minimum penalty
• Regularisation within 1 year: 1/8 of the minimum
• Regularisation within 2 years: 1/7 of the minimum
• Regularisation after 2 years: 1/6 of the minimum

Unfaithful Declaration

Under Article 51 of Legislative Decree No. 346 of 1990, filing a declaration that omits relevant assets, understates values, or includes non-existent liabilities results in a penalty ranging from 100% to 200% of the tax difference.

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Frequently Asked Questions

Do foreign heirs have to pay Italian inheritance tax?

Yes, where the inherited assets are located in Italy. Italian inheritance tax applies to assets situated in Italy regardless of the nationality or residence of the heir. The applicable rates and exemptions are the same for Italian residents and non-residents — what matters is the degree of relationship between the heir and the deceased, not the heir’s country of residence.

Is there double taxation if I also pay inheritance tax in my own country?

Potentially. Italy has limited double taxation treaty coverage specifically for inheritance tax. Taxes paid abroad in relation to the same succession assets may in some cases be deductible from the Italian taxable base. The specific treatment depends on the applicable bilateral conventions between Italy and the heir’s country of residence, and must be assessed case by case.

Can I submit the succession declaration myself as a foreign heir?

Technically yes, using the Revenue Agency’s electronic platform. In practice, for foreign heirs managing an Italian succession from abroad — often without an Italian tax code, without familiarity with the Italian system, and potentially dealing with multiple heirs and complex assets — engaging an Italian lawyer or tax professional to manage the declaration is strongly advisable to avoid errors, missed deadlines and penalties.

What if some heirs have not yet decided whether to accept or renounce the inheritance when the declaration deadline approaches?

The succession declaration can be filed even where not all heirs have made their decision. The declaration is a tax filing obligation — it does not in itself constitute acceptance of the inheritance. However, certain conduct in connection with the filing may be treated as tacit acceptance, so legal advice should be sought before filing on behalf of an heir who has not yet formally accepted.

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Request an Initial Legal Assessment

If you are based abroad and dealing with an Italian inheritance that involves tax obligations, contact our Italian inheritance lawyer to request an initial legal assessment. We will review the specific assets and circumstances of the succession and advise on the applicable tax obligations and how to manage them efficiently under Italian law.