In February 2025, following a period of adjustment to the Ministry of Justice's software, the changes to the consolidated text of inheritance and gift tax introduced by the reform (statuary order 139/24) came into force. These apply to inheritances opened on or after January 1, 2025. 

 

The most important changes include: 

 

• The obligation of the taxpayer to self-assess the inheritance or gift tax payable, which must be paid within 90 days of submitting the inheritance declaration. The tax authority will monitor the self-assessment, which means that citizens will also be held accountable in this regard. 

 

• The possibility of obtaining the release of bank accounts before submitting the declaration of inheritance, limited to the amount necessary to pay the so called mortgage, land registry, and stamp duties, if the sole heir is under 26 years of age. 

 

• Clarification of the conditions for tax exemption in the case of the transfer of a business within the family to descendants or spouses, provided that this results in the acquisition of business control or the consolidation of existing control.  The beneficiaries must continue to operate the business for five years or, in the case of the transfer of shares and stocks, retain control or ownership for five years. 

 

• Regulation of the taxation of trusts, which can be either “outgoing” (when the assets contributed to the trust are transferred to the final beneficiaries) or “incoming” (when the assets are contributed to the trust). It should be noted that, unlike Germany, Italy ratified the 1985 Hague Convention on the Law applicable to Trusts and their Recognition in 1992. 

 

Finally, we would like to point out that the tax authority confirmed the abolition of the so-called “coacervo” for inheritances in Circular 29/E of 2023. This means that the value of gifts made during the lifetime of the deceased is not added to the estate when assessing whether the heirs have exceeded the exemption limit, while the “coacervo” remains in place for subsequent gifts. 

 

Even after this reform, Italian inheritance and gift tax is generally less burdensome for taxpayers than German inheritance and gift tax, especially if the object of the transfer is a company or quotas or shares that enable the beneficiary to acquire or retain control of the company.