juris-FranceItalie

One of the most important and relevant issues for foreign citizens in Italy concerns doubtlessly the inheritance of real estate property situated in Italy. One may wonder what kind of law shall regulate the inheritance of the estate? Is it possible/better/compulsory to choose the enforceable law? Will that make a relevant difference for the heirs?

In Italy, issues of private international law as inheritance law are governed by Act n.218 of 31 may 1995 (legge n.218 di diritto internazionale privato).

Under this Act, the inheritance is regulated by the foreign citizen’s national law (art.46) but it is possible to decide differently; in this case, one should take up the option with full knowledge of the enforceable rules.

A UK citizen who owns a real estate property in Italy where he resides permanently (and at the time of his death), can then decide to have his inheritance regulated by the Italian law, but through an express and specific statement.

However, in lack of choice, according to article 46 as mentioned above, the inheritance should follow UK law which considers that assets inherited abroad are regulated by the law of the country of their location; therefore, the inheritance of estate assets situated in Italy will be regulated by Italian law according to the specific provisions of UK law.

If one decides to opt for Italian law, the whole inheritance will be regulated by and only by Italian law, which implies the enforcement of specific rules as described hereunder.

In fact, under the Italian law, when a person dies, the inheritance (successione a causa di morte) can be regulated by a will (successione testamentaria) or, in lack of a will, according to the law (successione naturale) and, in any case, shall be subject to specific taxes (imposte sulle successioni).
1. In the presence of a will

The will may be:
- personally handwritten, dated and signed by the testator (testamento olografo), in any language, on any kind of document, without witness or notary; - formal (testamento pubblico), drafted by a notary upon the testator’s instructions and according to some legal provisions (the will shall be read out by the Notary and signed by the testator in the presence of witnesses, then lodged by the Notary); - secret (testamento segreto), written by the testator, the notary or a third person and placed in a sealed envelop which shall be opened only after the testator’s decease.
The choice of the Italian inheritance law implies relevant restrictions to the testator’s faculty to choose the persons who will inherit.

In a will regulated by Italian law (successione testamentaria), the testator can’t deprive close relatives of the minimum statutory share of the estate assets (quota di legittima) due to them according to the law; if these minimum statutory shares are guaranteed, the testator can freely dispose of his/her estate, through legacies to third persons.
The subjects (legittimari) who cannot be deprived of a minimum share of the estate are the close relatives as wife/husband, descendants, ascendants.

For instance, if the deceased person leaves :
- a surviving wife/husband and two children or more: the spouse/husband shall inherit ¼ of the estate and equal shares of 1/2 of the assets shall go to the children ;
- a surviving wife/husband and one child: the spouse/husband shall inherit 1/3 of the estate and the child 1/3 of the estate ;
- a surviving wife/husband and no child: the spouse/husband shall inherit ½ of the estate and the other relatives (sibling, parents) ¼ of the estate ;
- only a surviving wife/husband: the spouse/husband shall inherit ½ of the estate;
- one child and no surviving wife/husband: the child shall inherit ½ of the estate;
- two or more children and no surviving wife/husband: the children shall inherit in equal share 2/3 of the estate.

Should the testator breach these rules and a relative not inherit his minimum statutory share, he can apply to an Italian Court to get a redistribution of the estate according to Italian legal rules (azione di reduzione).

The heirs must explicitly or implicitly accept the inheritance or renounce it, as the acceptance implies the substitution of the deceased person for every debt or credit related to the inherited estate; the acceptance may be “simple” or with the benefice of inventory, which will be lodged by a notary.
On the contrary, there’s no formality to accept a legacy, but the beneficiaries have the faculty to renounce it.
If estate assets have been bought in Italy through a trust regulated by UK law, the trust shall be regularly implemented in Italy, unless it breaches some imperative rules: minimum statutory shares of assets as mentioned above, bankruptcy laws and revocatory actions, minors’ and incapable persons’ rights and personal and estate effects of marriage.

2. In lack of a will

In lack of a will (successione naturale), the inheritance will be divided according to a precise schedule, provided by law; only the relatives up to the sixth grade and the wife/husband shall inherit.
In lack of heirs, the inheritance goes to the Italian State.
3. The inheritance taxes
The inheritance and gift tax (imposta sulle successioni e donazioni) was cancelled in Italy in 2001 by Berlusconi’s government. No inheritance tax was therefore payable on legacies and inheritance to spouses/husbands, children and other relatives up to the forth degree.
The tax was reintroduced by Prodi’s government but in a very “light” form, as it is much lower than the average inheritance taxes applied in other European countries.
For any inheritance or legacy exceeding € 1.000.000.000 to spouse/husband and direct-line relatives (parents and children), the tax amounts to 4%; for inheritance or legacy exceeding € 100.000 to a sibling, 6%; for any relative up to the forth degree, direct line in-law and indirect line in-law up to the third level, 6% and for any other subject, 8%.
Other kinds of property transfer fees will also have to be paid by the heirs and beneficiaries of legacies: mortgage tax (imposta ipotecaria) will be 2% of the property value on record or € 168 if the property is the main house of the beneficiary (prima casa) and the cadastral tax (imposta catastale) will be 1% of the property value on record or € 168 for the “prima casa”.
The heirs of a real estate or the beneficiary of such a legacy must file with the competent tax agency (agenzia delle entrate) of the testator’s last residence, a declaration of inheritance (dichiarazione di successione), containing information about their identity and the real estate property, joining the proof of payment of the taxes mentioned above.
In any case, the assistance of a Italian notary and of a Italian specialised lawyer is highly recommended!!
Eve Mongin
Lawyer
Scassellati Sforzolini firm