Content developed with the assistance of AI tools and reviewed by the author.
The new double-€1 million threshold is a real opportunity — but only if you file correctly and on time
Your parent died in Milan. They owned a flat worth €420,000. You live in São Paulo. You assume the Italian tax office will send you a bill, or that the Brazilian tax system you already know — with its inventário (the Brazilian court-supervised or notarial estate proceeding) and its state-level ITCMD inheritance tax — will cover your Italian exposure somehow.
None of those assumptions is correct. And each one, left uncorrected, starts a clock you cannot stop.
Two reforms took effect simultaneously at the start of 2026, and understanding both is the first useful thing you can do this week.
Split into two sentences. Before this change, any Italian property gifted to you inter vivos by a parent reduced the €1 million allowance you could claim on inheriting from that same parent. Since 1 January 2026, the two allowances are entirely independent. A Brazilian heir who received, say, a €300,000 Italian studio flat as a gift five years ago can now also inherit up to €1 million of Italian assets from the same parent completely free of Italian inheritance tax — imposta di successione. The lifetime gift does not reduce the inheritance allowance at all.
The 4 % rate applies to spouses and direct-line relatives (children, parents) with this €1 million allowance per beneficiary. Siblings are taxed at 6 % on amounts above €100,000. All other beneficiaries — cousins, friends, an unmarried partner — pay 8 % with no personal allowance. The law governing these rates is Legislative Decree No. 346 of 31 October 1990, as substantially amended by Legislative Decree No. 139 of 18 September 2024 and as confirmed and extended by Law No. 199/2025.
The second reform has been in force since 1 January 2025. The Agenzia delle Entrate no longer calculates and issues a tax assessment to heirs. You must now calculate the tax yourself, declare it correctly in the dichiarazione di successione (the Italian succession declaration, the formal estate-tax return filed with the tax authority), and pay within the statutory windows. Self-assessment is standard in many countries. In Italy it is new, and non-resident heirs are the group least likely to know about it.
Yes, if the estate includes Italian-situs assets. Italian inheritance tax is territorial for non-resident beneficiaries: it reaches only assets located in Italy, not worldwide assets. Your share of the Milan flat is taxable in Italy regardless of where you live. Your Brazilian accounts, your São Paulo apartment, and any Brazilian investments are outside the Italian tax authority's scope unless the deceased was resident in Italy at the date of death, in which case worldwide assets are in scope — but only for the deceased's total estate, not for your foreign assets.
The Italy–Brazil double-taxation convention signed in 1978 (in force since 1980) covers income taxes — dividends, interest, royalties, employment income. It does not cover inheritance tax. There is no treaty shield. Whatever you owe to the Agenzia delle Entrate, you owe in full. Your Brazilian advogado will confirm separately that the ITCMD paid in Brazil — whose rate varies by state, from roughly 2 % to 8 % — does not reduce your Italian bill.
Unlike in most common-law jurisdictions, where the estate itself is taxed and the heir receives a net legacy, Italian inheritance tax is assessed on each beneficiary's individual share. This means the tax position of one heir does not affect another heir's liability. If you and a sibling each inherit half the flat, each of you calculates and pays on your own share separately.
Consider a concrete scenario. Your mother, resident in Rome, dies in March 2026 leaving a flat valued at €700,000. You are her only child. Seven years ago she gifted you a small Italian garage worth €60,000. Under the old rules, your €1 million allowance would have been reduced by €60,000 — leaving €940,000 before tax began. Under the 2026 reform, the gift is irrelevant. Your inheritance allowance is a full €1 million. The entire €700,000 flat passes to you free of Italian inheritance tax. Tax owed: zero.
Now change the figures. The flat is worth €1,350,000. Your allowance is €1 million. Tax is due on €350,000 at 4 %, giving €14,000. You must calculate that figure yourself, enter it in the succession declaration, and pay it within 90 days of the expiry of the 12-month filing deadline. In practice: if your mother died on 15 March 2026, the declaration is due by 15 March 2027. Tax is due by 14 June 2027. Miss the payment window and interest accrues from the first day.
This is the self-assessment trap. The declaration was always required; the obligation to compute and pay the tax is new. Many heirs file the declaration thinking the office will respond with a figure. It will not. The tax falls due automatically once the deadline passes, whether or not you received a notice.
Nemo plus iuris ad alium transferre potest quam ipse habet — no one can transfer to another more right than they themselves have. The maxim, foundational to property law, runs through every Italian succession: you inherit what the deceased owned, subject to whatever encumbrances Italian law recognises, including this tax obligation.
The declaration — the dichiarazione di successione — must be filed electronically through the Agenzia delle Entrate's online portal. Non-resident heirs who cannot access the portal may send a paper version by post to the Agenzia delle Entrate office responsible for the deceased's last Italian tax domicile. That postal option exists; it is not publicised prominently, but it is confirmed in the Agenzia delle Entrate's guidance on non-resident succession procedures.
To prepare the declaration you will need, as a minimum: the deceased's Italian tax code (codice fiscale), the original death certificate apostilled under the Hague Convention (Brazil has been a Hague Apostille Convention member since 14 August 2016, with apostilles issued by the Conselho Nacional de Justiça — the CNJ), an Italian-language certified translation of the death certificate, a land registry search (visura catastale) for every Italian property, an official valuation or the declared cadastral value of each property, documentary proof of any debts of the estate (funeral costs, outstanding mortgage balances), and proof of your relationship to the deceased. If you were designated by will, you will need the will admitted to probate or accepted in Italy.
The declaration must list all Italian-situs assets, the heirs, their shares, the tax calculation, and any deductions claimed. Errors in the cadastral values — the figure the tax office uses as a minimum taxable base — are the single most common cause of subsequent disputes. In our files, the most common mistake is to use the commercial sale price rather than the cadastral value multiplied by the statutory coefficient. The latter figure is almost always lower and is the floor the law sets.
Yes. Italian law gives every heir the right to renounce the inheritance (rinuncia all'eredità under Article 519 of the Italian Civil Code) within ten years of the date of death. Until you formally accept — expressly, or by conduct that implies acceptance, such as selling estate assets — you are not personally liable for the deceased's debts. Renunciation is made by a declaration before an Italian notary or to the clerk of the competent Italian court. It cannot be conditional or partial.
If the estate is solvent and the flat has equity, renunciation makes no sense. But if there is a mortgage that exceeds the property value, or undisclosed Italian tax debts, renunciation is a clean exit. One important detail: a Brazilian court supervising the local inventário may not automatically recognise an Italian renunciation. Your Brazilian advogado will advise on whether a separate Brazilian procedural step is needed.
Yes, and this is where a planning error typically surfaces. Regulation (EU) No. 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions in matters of succession — commonly called the EU Succession Regulation — applies to the succession of any person who dies owning assets in an EU Member State, regardless of the deceased's nationality. Italy is bound by it. Brazil is not an EU Member State, but that does not remove the Regulation's reach: what matters is that an Italian flat is involved.
Under the Regulation, the default rule is that the law of the country where the deceased was habitually resident at the date of death governs the entire succession, including the Italian property. If your parent lived in Brazil and was habitually resident there, Brazilian law may govern who inherits and in what shares — unless a valid choice-of-law clause designating Italian law (or the law of the deceased's nationality) was included in a will. Italian courts have accepted this analysis consistently with the framework established by the Court of Justice of the European Union in Mahnkopf (CJEU, Grand Chamber, 1 March 2018, Case C-558/16).
Here is the critical risk for Brazilian heirs: even if Brazilian succession law applies to determine the shares, Italian forced-heirship rules — the legittima, the forced heirship share guaranteed to children and spouses under Articles 536 to 564 of the Italian Civil Code — are treated by Italian courts as part of Italian public policy (ordine pubblico). The Italian Court of Cassation, Joint Divisions, in their judgment No. 38162 of 30 December 2022 (Cass. civ., Sez. Unite, sent. 30 dicembre 2022 n. 38162) confirmed that a foreign succession that excludes forced heirs may be challenged in Italy when it concerns Italian property. A Brazilian will that freely disinherits a child in favour of, say, a charitable foundation may not be given full effect in Italy. The affected child can bring an azione di riduzione — an action to reduce testamentary dispositions that exceed the freely disposable portion — within ten years.
The Italy–Brazil double-taxation convention already noted does not assist here: it applies to income taxes, not to succession law or to the forced-heirship regime. The two systems operate in parallel, and the Italian rules take priority over Italian-situs assets.
These are two separate proceedings in two separate legal systems. The Italian dichiarazione di successione is a tax-and-administrative document, not a court proceeding; it does not vest title on its own. Title to the Italian flat transfers to the heirs at the moment of death by operation of law (Italian Civil Code, Article 459), but to sell or mortgage the property the heirs must register the estate, pay any tax due, and proceed to a notarial deed. The Brazilian inventário — whether judicial or notarial, depending on the circumstances your Brazilian advogado will assess — addresses the Brazilian portion of the estate and has no automatic legal effect on the Italian title.
If the Italian judgement recognising the succession or the Italian notarial deed needs to produce legal effects in Brazil, it will require homologation by the Superior Tribunal de Justiça (STJ) under Brazilian civil procedure rules. Conversely, a Brazilian court order has no direct effect in Italy: it must be recognised under Article 64 of Law No. 218 of 31 May 1995, Italy's private international law statute, which sets out the conditions for recognition of foreign judgements.
Allow for both timelines. In our files, heirs who assumed the Italian process would wait for the Brazilian one — or vice versa — have missed the 12-month Italian filing deadline entirely.
If I already received an Italian property as a gift from my parent, does that reduce my inheritance tax allowance after 1 January 2026?
No. Since 1 January 2026, under Law No. 199/2025, the gift and inheritance allowances are entirely separate. A prior inter vivos gift of Italian property does not reduce the €1 million allowance available to a child or spouse on the subsequent inheritance. This is the central change of the 2026 reform and applies to deaths occurring from 1 January 2026 onwards.
What happens if I miss the 12-month deadline to file the Italian succession declaration?
A late declaration attracts penalties under the Italian tax code (Legislative Decree No. 346/1990). Filing within 30 days of the expired deadline may attract a reduced penalty under voluntary disclosure rules (ravvedimento operoso). Beyond that window, the penalties escalate and the tax authority may issue its own assessment, adding interest. The Italian flat cannot be freely sold until the succession is regularised, so delay has a direct practical cost.
Can I choose which law governs the inheritance of the Italian flat if my parent had a will?
Under Regulation (EU) No. 650/2012, a testator may designate the law of their nationality to govern their succession. If your parent was an Italian national, they could choose Italian law. If they were Brazilian, they could designate Brazilian law — but that choice cannot override Italian forced-heirship rules when Italian-situs property is at stake and an Italian forced heir challenges the will. The choice of law must be made expressly in a will drawn up in a form valid under the applicable law, and it should be reviewed by an Italian lawyer before assuming it will be effective against all claims.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
