nvy51899

Hi,
I am a UK citizen waiting for Italian citizenship. I indefinate residence in Italy as I have been here many years.
Do I need to pay any tax in Italy on an inheritance I have received from the UK. Inheritance tax has been paid in the UK but is there anything else I need to pay if I transfer it over here.
Also do I need to declare it?
Thanks

daniel_t

This is not official tax advice, so I can't take responsibility for the accuracy of the information I give below.

It sounds like you're registered as a resident in Italy, and, regardless of your nationality, you become a tax resident for any tax year if you've lived in Italy for more than 183 days (edit: in that year).

I can't say for sure, but there are different rates depending on who has sent monetary gifts or inheritance to you - family, relatives or friends. The relevant declaration form is F23.

Try the website of Agenzia delle Entrate, the Italian equivalent of our HMRC.

modicasa

If you leave less than a million then relatives in direct line - spouse, children, grandkids, pay nothing. Above 1 million its 4%. For brothers/sisters etc its 6% above 100.000
When you do the succession you would pay 4% to the tax office to do the succession. So everything depends on what you've been left. If you are bringing the money into Italy make sure you have the paperwork to show where the money is coming from.

nvy51899

Would this still be the case if the relative who died was a UK citizen and inheritance tax had already been paid in the UK? That would mean inheritance tax had been paid in 2 countries. Seems unfair.

UPDATE. :
I have just found this on the internet:
The Italian inheritance tax concerns not only the assets of Italian citizens, but also all assets, in Italy and abroad, of foreign citizens if they have their tax residency in Italy at the time of their death. On the other hand, the Italian inheritance tax is calculated only on assets located in Italy if the deceased, whatever their citizenship, is not a tax resident in Italy at the time of their death.

As my relative was not a resident or citizen of Italy (only me) this seems to suggest no inheritance tax is payable here. Or am I misunderstanding it. Or maybe its just wrong.

modicasa

I think you're right. It's about residence and not citizenship, so if you are resident in ITaly at the time of your death your heirs pay Italian inheritance tax on everything, no matter where it is. If you arent resident then your heirs pay IHT on only your Italian assets.

nvy51899

Hopefully this is the case. I shall have to make some enquiries.
Either way thank you for you help 😊

nicktonight

I asked my commercialista about this as I received an inheritance a few years ago. She said I would not have to make a specific declaration about this. However the inherited sum must show up on my yearly tax declaration of foreign bank accounts and I would be taxed accordingly IVAFE (0.2 %+fixed sum of about 34Euros)
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jonwel

That's good news for me because a house in England that belonged jointly to my father (d. 2001) and his second wife is now up for sale and I (tax resident in Italy) will be inheriting a quarter of that. From what I read above (thanks to modicasa) I shouldn't have anything to pay (but presumably notary and agency fees - any idea how much?).
Anyway, a question follows from that: I'd like to use the money to buy a small flat (mono- or bilocale) but to put it in some younger people's name, while I would be protected by a bare ownership / nuda proprietà clause guaranteeing my right to stay there. I won't explain all the reasons for this but I can specify that there is no official family relationship involved. Any idea what difficulties could arise? Obviously I'll be getting official advice, but this is just to sound out.
Thanks!

PS Someone tells me that bare ownership as above can be used only (a) for someone who was already living in the house at the time of purchase or (b) for a relative of the new owner. Could this be true?

modicasa

I think you can give usufrutto to anyone you like, its not just for family. In this case however, you want to be the usufruttario while the owner will be someone else, and therefore they need to buy the property and grant you the usufrutto. Or you buy it and donate it to them (which will cost you twice as much) Obviously its for life, and cannot be revoked except by common consent. YOu would have the usufrutto which is for life, and all the bills and maintenance, while the actual nuda proprieta could be in the name of anyone you decide, and after your death they become the 100% owner.

For the other thing - the probate will be done in the UK presumably so there is no notary here, as there is no succession here. If the solicitor doing the probate trasnfer your funds to here they will have to supply a bit of paperwork to show its an inheritance to the bank. You just need to declare what you receive as inheritance on your dichiarazione dei redditi. If you bring it all here, there will be no IVIE to pay.

jonwel

Thanks modi. You cotributions are always very useful.

jonwel

Just another domandina, Modi, as the prospect of inheriting seems to be getting closer!.You say:
If the solicitor doing the probate transfers your funds to here they will have to supply a bit of paperwork to show its an inheritance to the bank.

Do you know what the paperwork would consist of?.Just a signed statement? And I suppose I would then have to pay for a certified translation!

37100

Now I am totally confused. My commercialista advised me that, in most cases, an inheritance transferred here only needs the correct paperwork and does not need to be included in my tax return. Is this wrong , Modi?

modicasa

Im doing this now for my dads estate. I am getting his death certificate and a copy of the probate from the Uk, so I can prove where the money comes from when I bring it into Italy, should they ask. Your bank in ITaly will want to know where the money comes from if its over a couple of thousand. It does not need to be declared on your tax return if you bring the money here as soon as you get it. Obviously if it sits in a UK bank account then you would have to declare it on your IVIE earnings, so I reckon the trick is to bring the money over as soon as you get it. Its more antirecycling paperwork than tax paperwork. They just may want to know how you got the money in the first place.