Italy
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Inheritance in Italy
The word is getting around that Italy has eliminated practically all taxes on donations and inheritance, at least between close relations. One website even proclaims that the best thing you can do for you kids is to die in Italy. The purpose of this article is to establish whether this is the truth or idle propaganda.
Let’s say up front that moving to Italy merely to avoid inheritance tax is ridiculous. But if you already have in mind to transfer to Italy on a permanent basis, or to stay here if you’ve already made the move, then the fact that you can pass on your wealth without having to hand over a hefty slice to the government is a nice little extra.
There is a potential downside, however. Leaving your estate (i.e. wealth) under Italian law means that you are subject to the Italian law of succession. This is quite different from the UK, where providing you leave a will, you can more or less leave your assets to anyone you want, cutting out all kith and kin as you wish. In Italy, this isn’t allowed. It is impossible to ‘disinherit’ anyone, however much Italian fathers may threaten wayward kids with this dire possibility.
Here, the law applies rules of so-called forced heirship’. In other words, if you do leave a will, then you can make legacies to whoever you want up to a certain percentage of your estate, while the rest (the bulk in fact) has to be left to your spouse, if surviving, your children, if any, or to other close relatives. On the other hand, if you don’t leave a will, the law imposes how the estate is to be inherited. If there are no legitimate heirs, the inheritance goes to the state.
THE RULES OF HEIRSHIP
At this stage we have to introduce some key Italian Legal concepts:
Successione per testamento is the expression used for the distribution of an estate according to the last will (and testament) of the deceased.
Successione necessaria is the expression used for rules that insist the person writing the will leaves a certain proportion of their estate to their close family: spouse, close descendants, or close ancestors (ascendenti). These people are known as eredi necessary (necessary heirs) or legittimarri.
Quota (del patrimonio) di riserva is the portion of the estate that has to go to the necessary heirs.
Quota (del patrimonio) disponibile is the portion that the owner can freely dispose of in the form of legacies to favourite charitites, relatives, friends, servants and so on.
Particular assets can also be left to specific heirs, including the necessary heirs.
Note that the including total estate (asse ereditario) includes not only the assets owned by the deceased at the time of death, but all of the major donations made during his or her life. So if a substantial part of the estate has been donated by the deceased during his or her life to people or institutions that are not ‘necessary heirs’, and the total amount of these donations exceeds the amount of the disposable portion on death, the ‘necessary heirs’ have the right to claim back their rightful portion, if they want. This is known as an azione di riduzione.
Heirs have the right to accept or refuse an inheritance, also because the deceased’s liabilities are inherited along with their assets. Similarly, heirs with a right to take legal action to claim back donated assets are not obliged to do so.
Dying intestate (without a will)Dying intestate in the UK can create a fairly tragic situation, especially for the surviving spouse, because the underlying assumption is that the children inherit. The spouse gets little or nothing, except maybe use of the family house and some income, often having to rely largely on the goodwill of her children. This situation does not exist in Italy, again because of the rules of forced heirship, in this case known as successione legittima. Note that successione legittima also applies if there is a will but for some reason it does not cover all of the deceased’s assets. This situation can arise if the will leaves specific assets or specific amounts of money to people without nominating anyone erede universale (universal heir) to inherit any other assets that may have been accumulated in the meantime.
Successione legittima is so called because identification of the heirs is left up to the law (the Civil Code to be precise). This can be quite a problem as there is no will that lists who they are. In any case, the law assumes, quite reasonably, that if someone did not leave a will it is because they wanted to leave their assets to their family and/or close relatives.
Eredi Legittimi ( legitimate heirs) Those who inherit under this system of successione legittimari are known as eredi legittimi or legitimate heirs, not to be confused with the legittimari which, as we have seen, ,is the alternative name for eredi nesessari. But it is easy for confusion to arise because an erede legittimaro can often be one and the same person. It is the underlying legal concepts that are different.
Italy recognises a holographic will, that is a handwritten document which is signed and dated – no witnesses are necessary. You should also get a signed and dated translation. If after digesting this, you feel happy about the way that inheritance law works in Italy, then you need to do nothing more. If, on the other hand, you plan to leave everything to a dedicated beneficiary, then ensure you reside in the UK.
What next?
If you are thinking of buying a property in Italy then why not talk to an expert in international law who can help you avoid any pitfalls. Please contact us to discuss your purchase or call us now on 0844 578 4003.
The International Property Law Centre LLP
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