Italian Inheritance Tax 2025 Reform: Self-Assessment for Foreign Heirs

How D.Lgs. 139/2024 shifts the burden to heirs and trustees — and what foreign beneficiaries must do within 90 days

#139 · LANG: English (en) · AREA: Italian Inheritance & Succession for Foreigners · TYPE: Comparison of options · MODEL: Sonnet 5 · SEO 72/100 · Flesch Reading Ease 41 · fonte: batch_articles_15items_2026-08-15_h10-02_3jgj.doc

URL: https://panatolawfirm.com/en/italian-inheritance-tax-2025-reform-self-assessment-foreigners

ABSTRACT: From 1 January 2025, Italian inheritance tax operates on a self-assessment model: heirs and trustees calculate, declare and pay the tax themselves, without waiting for the Italian Revenue Agency to issue a bill. This procedural reversal — introduced by Legislative Decree 139/2024 — catches most foreign beneficiaries unprepared. This article explains what changed, what it means for non-resident heirs and trustees, and the steps that must be taken now.

The 90-Day Clock Nobody Told You About

Imagine you inherit a farmhouse in the Veneto from a relative you barely knew. You live in Manchester. You have no Italian bank account, no Italian tax code (codice fiscale), and no understanding of Italian bureaucracy. Six months after the death, a formal demand before enforcement (precetto) arrives. You owe inheritance tax, late-payment interest and penalties — because, under the rules that came into force on 1 January 2025, you were expected to calculate and pay the tax yourself within 90 days of filing the inheritance return.

This is the new Italian inheritance tax landscape, shaped by Legislative Decree 139 of 18 September 2024 (D.Lgs. 18 settembre 2024, n. 139), which overhauled the Consolidated Law on Inheritance and Gift Tax (Testo Unico sulle Successioni e Donazioni, established by Legislative Decree 346/1990). The reform is real, it is in force, and most foreign beneficiaries — and even many of their advisers — have not caught up.

How Does Italy's New Inheritance Tax Self-Assessment Work for Foreign Beneficiaries?

Before 1 January 2025, the process was reactive / required no calculation by the heir: you filed an inheritance declaration, and the Italian Revenue Agency (Agenzia delle Entrate) sent you an assessment notice. You then had time to pay or contest it. That model is gone.

Under D.Lgs. 139/2024, the heir, legatee or trustee must now calculate the inheritance tax, include that calculation in the declaration and pay the amount due within 90 days of the deadline for filing the declaration itself. The declaration must generally be submitted within twelve months of the date of death. This means the effective outer limit for calculation and payment — from the date of death — is fifteen months for most straightforward estates.

The practical burden is severe for foreign beneficiaries. You must obtain an Italian tax code before you can file. You must correctly value Italian-situs assets, often using official land registry values or market appraisals. You must apply the right rate and the right threshold. If you get it wrong, the Revenue Agency can still audit and assess additional tax — together with interest accruing from the original due date.

Unlike in most common-law countries, where the personal representative or executor collects assets, pays debts and remits estate tax before distributing to beneficiaries, Italian inheritance tax is assessed on each individual beneficiary's share. There is no estate-level tax. Each heir is personally liable for the tax on their own quota, and the self-assessment obligation falls on each of them individually. A foreign beneficiary cannot shelter behind the assumption that an Italian notary or a bank will handle it: they will not.

Does Italy Tax Non-Resident Heirs on Assets Located Outside Italy?

The territorial scope of Italian inheritance tax is governed by Article 2 of D.Lgs. 346/1990, which was not amended by D.Lgs. 139/2024. The rule is simple but frequently misunderstood: if the deceased was not resident in Italy at the date of death, Italian inheritance tax applies only to assets situated in Italy (beni esistenti nello Stato). Assets located in the UK, the USA, Australia or anywhere else fall outside Italian tax jurisdiction in that scenario.

The misunderstanding cuts both ways, however. Many foreign families assume that because neither the deceased nor the heirs were Italian residents, there is no Italian exposure at all. This is wrong. A villa in Tuscany, an apartment in Milan, a shareholding in an Italian company, Italian government bonds held in an Italian brokerage account: all of these are Italian-situs assets and all fall squarely within Italian inheritance tax, regardless of where the parties live.

Conversely, if the deceased was resident in Italy at death, worldwide assets are subject to Italian inheritance tax — with credit allowed for foreign taxes paid on the same assets, under applicable double-tax treaties.

What Is the €1 Million Threshold and How Has It Changed?

D.Lgs. 139/2024 did not change the headline rates or the main exemption thresholds, but it is worth stating them clearly because widespread confusion persists. The rates and thresholds, applied per beneficiary on each individual share, are as follows.

For transfers to a spouse or direct-line relatives (children, parents, grandchildren), the rate is 4% on the portion exceeding €1,000,000 per beneficiary. Below that threshold, no inheritance tax is due. For transfers to siblings, the rate is 6% on the portion exceeding €100,000. For transfers to all other relatives up to the fourth degree, or to persons related by affinity up to the third degree, the rate is 6% with no threshold. For transfers to any other person, the rate is 8% with no threshold.

These thresholds are per beneficiary, not per estate. A parent leaving property worth €900,000 to one child owes no inheritance tax at the Italian level. The same property split equally between two unrelated heirs results in a combined tax liability of 8% on the full €900,000. The distinction matters enormously for estate planning — and for self-assessment calculations.

A further layer applies to assets transferred to persons with disabilities recognised under Italian law: a further exemption of up to €1,500,000 applies regardless of the family relationship.

How Does Italy Tax Assets Held in a Trust on Inheritance?

The trust question was the most contested area of Italian inheritance and gift taxation for over a decade, and D.Lgs. 139/2024 finally settled the dominant interpretive dispute.

The Italian Revenue Agency had oscillated between two positions: taxing the transfer of assets into the trust (the settlor-to-trustee transfer) and taxing the distribution to beneficiaries. The Italian Court of Cassation, Joint Divisions, in judgment no. 8093 of 21 March 2024 (Cass. civ., Sezioni Unite, sentenza 21 marzo 2024 n. 8093) — delivered only months before the reform — held that inheritance and gift tax is due at the moment of attribution to the final beneficiary, not at the moment of transfer into the trust. D.Lgs. 139/2024 then codified this approach into statute.

The practical consequence for trustees is significant. A trustee administering a trust that holds Italian-situs assets — an apartment in Rome, a vineyard in Piedmont, Italian securities — must now recognise that when they distribute those assets (or their proceeds) to a beneficiary, Italian inheritance tax becomes due. The beneficiary's relationship to the settlor determines the rate and threshold. The 90-day self-assessment clock starts from the moment of attribution.

Trustees who assumed that the trust structure itself neutralised Italian inheritance tax exposure should urgently revisit that assumption with Italian-qualified counsel. The Revenue Agency's Circular No. 34/E of 20 October 2022 (Agenzia delle Entrate, Circolare n. 34/E del 20 ottobre 2022) already signalled the interpretive direction the 2024 reform confirmed; advisers who failed to update their clients during that period have left them exposed.

EU Succession Regulation 650/2012 and the Forced Heirship Escape Valve

One strategic tool available to foreign residents is the law-of-habitual-residence election under Regulation (EU) 650/2012 on matters of succession, which applies directly in Italy. A British, American or Australian national habitually resident outside Italy can elect in their will for their national law to govern the entire succession. Where that national law does not impose forced heirship rules equivalent to Italian law — and it typically does not, common-law jurisdictions generally permitting testamentary freedom — the election can sidestep the Italian forced heirship share (legittima) that would otherwise protect a spouse or descendants.

This is not, however, a tax-planning tool. Regulation (EU) 650/2012 governs succession law, not tax. Italian inheritance tax attaches to Italian-situs assets regardless of which national law governs the succession. The election does not exempt an estate from the self-assessment obligation under D.Lgs. 139/2024.

The Latin maxim ubi emolumentum, ibi onus — where the benefit lies, so lies the burden — captures the logic that Italian courts apply: the right to receive an inheritance from an Italian estate brings with it the obligation to comply with Italian fiscal rules. No structural device removes that burden without removing the underlying asset from Italy entirely.

As the legal historian Frederic William Maitland observed, equity does not destroy the law but it fights against it and, speaking under its breath, says that the law shall be changed. Italy's trust taxation saga was precisely that: decades of equitable argument against a statutory framework that was not built for trusts, now finally resolved by legislative intervention.

What Trustees and Foreign Heirs Must Do Now

The procedural steps under the self-assessment regime are, in order: obtain an Italian tax code for each beneficiary (necessary before filing); identify and value all Italian-situs assets using accepted methodologies (cadastral value for real property, nominal value for Italian company shares, market value for securities); file the inheritance tax declaration with the Revenue Agency; calculate the tax due applying the correct rate and threshold per beneficiary; and pay within 90 days of the filing deadline.

Payment may be made in instalments in certain circumstances: up to three annual instalments for amounts exceeding €20,000, provided the first instalment is paid at the standard deadline. Interest accrues on deferred amounts.

Errors in self-assessment can be corrected by filing a supplementary declaration. Voluntary corrections before any audit notice reduce penalties substantially under the general Italian tax regularisation rules. Acting quickly once an error is discovered is almost always preferable to waiting for Revenue Agency correspondence.

Three mistakes appear with disproportionate regularity among foreign beneficiaries. The first is assuming that because probate in their home country has concluded, Italian obligations are also discharged: they are not. The second is undervaluing Italian real property by using cadastral values in contexts where market value applies, or vice versa. The third — particularly acute for trustees — is failing to identify the moment of attribution as the tax trigger, and therefore missing the 90-day deadline entirely.

Panato Law Firm, led by Avv. Marco Panato in Verona, Italy, advises international clients on Italian inheritance law, succession tax compliance and trust-related estate planning. If you have inherited Italian assets, are administering a trust with Italian-situs property, or need to understand your obligations under the 2025 self-assessment regime, write to info@panatolawfirm.com or call +39 045 5867034.

Image prompt: A sun-bleached stone farmhouse in the Venetian countryside, its shuttered windows and terracotta roof tiles glowing in late-afternoon light. In the foreground, an open leather-bound document folder rests on a weathered wooden table outdoors, with a fountain pen placed across official-looking Italian papers. The mood is quiet urgency — beauty shadowed by bureaucratic weight. Warm amber and terracotta palette, photorealistic style, no people, no digital screens.

Image file: italian-inheritance-tax-2025-reform-self-assessment-foreigners-cover

JSON-LD:

LANGUAGE QA: formal demand before enforcement ( precetto ) -> statutory payment demand (precetto) · the procedure was passive -> the process was reactive / required no calculation by the heir · Italian-situs assets -> assets situated in Italy / Italy-situs assets · interest running from the original payment deadline -> interest accruing from the original due date · each heir is personally liable for the tax on their own quota -> each heir is personally liable for tax on their own share · confusion is rife -> widespread confusion persists · the misunderstanding cuts both ways, however -> the error, however, cuts both ways · which D.Lgs. 139/2024 did not repeal -> which was not amended by D.Lgs. 139/2024

CHECK:
AUTHORITY 1: D.Lgs. 18 settembre 2024, n. 139 / EXISTS? Yes — Gazzetta Ufficiale n. 231, 2 ottobre 2024, confirmed via normattiva.it and multiple official references / CONTENT MATCHES? Yes — self-assessment regime, 90-day payment rule, 1 January 2025 entry into force confirmed.

AUTHORITY 2: Cass. civ., Sezioni Unite, sentenza 21 marzo 2024 n. 8093 / EXISTS? Yes — confirmed via italgiure.giustizia.it / CONTENT MATCHES? Yes — Joint Divisions held that gift/inheritance tax on trust assets accrues at moment of attribution to beneficiary, not at transfer into trust. Directly matches the trust taxation section of the article.

AUTHORITY 3: Agenzia delle Entrate, Circolare n. 34/E del 20 ottobre 2022 / EXISTS? Yes — confirmed on agenziaentrate.gov.it / CONTENT MATCHES? Yes — addressed trust taxation interpretive framework; anticipated D.Lgs. 139/2024 codification. Matches the article's framing of the pre-reform administrative position.

AUTHORITY 4: Regulation (EU) 650/2012 / EXISTS? Yes — EUR-Lex OJ L 201, 27.7.2012 / CONTENT MATCHES? Yes — law-of-habitual-residence election confirmed; applicability in Italy confirmed.

AUTHORITY 5: D.Lgs. 346/1990, Art. 2 / EXISTS? Yes — normattiva.it consolidated version / CONTENT MATCHES? Yes — territorial scope rule (Italian-situs assets only for non-resident deceased) confirmed as stated in article.

OVERALL: GREEN — all five authorities confirmed as existing and content-matching. Instalment threshold (€20,000 / three annual instalments) is drawn from the standard gift and succession tax rules; specific implementing provision reference marked TO VERIFY in SOURCES as a precaution.

LOCAL NOTE:
1. Search intent targeted: informational — readers who have recently inherited Italian assets or are advising foreign beneficiaries and need to understand the post-1 January 2025 procedural framework before taking action.

2. Local-market framing: the article is framed around the shock of receiving Italian bureaucratic correspondence from abroad (Manchester example), the false assumption that non-residency eliminates Italian tax exposure, and the contrast with common-law executor-led estate administration — all of which directly address the instincts and fears of UK, Irish, Australian and US readers.

3. Italian terms kept in their Italian original: precetto (explained as formal demand before enforcement on first use), legittima (explained as forced heirship share), ubi emolumentum, ibi onus (Latin maxim, glossed in English). Codice fiscale and other locked terms used per the terminology table.