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Why US attorneys and their clients wait for a bill that never comes — and what that mistake costs
Your client's father died in July. He owned an apartment in Florence. The US estate attorney filed the paperwork, advised the family to wait for the Italian tax authority to send an assessment, and moved on to other matters. No bill arrived. Months passed. Then a notice came — not a tax demand, but a penalty notice, plus interest running from the day the payment was due.
This scenario is now common. Italy's inheritance tax system changed fundamentally on 1 January 2025, and most US estate practice has not caught up.
The Italian inheritance tax declaration — the dichiarazione di successione, the estate return filed with the Italian Revenue Agency (Agenzia delle Entrate) — must be submitted within 12 months of the date of death. That deadline has not changed.
What changed is everything that happens next.
Under the reformed framework introduced by Legislative Decree 139 of 18 September 2024 (D.Lgs. 139/2024, G.U. n. 231 of 2 October 2024) and given full effect / implemented by Legislative Decree 123 of 14 August 2025 (D.Lgs. 123/2025, G.U. n. 186 of 12 August 2025), heirs now self-assess. They calculate the tax themselves inside the declaration and pay it within 90 days of filing. The Revenue Agency audits afterwards rather than billing upfront.
That 90-day payment window is the trap. It is not a grace period. It is the deadline. Miss it and interest accrues from day 91. Miss the underlying 12-month declaration and the penalties are heavier still — Italian law does not excuse ignorance of domestic tax procedure.
Yes. Non-resident heirs pay Italian inheritance tax (imposta di successione) on assets located in / situated in Italy, regardless of where the deceased or the heir was resident. A US beneficiary inheriting an apartment in Rome or a bank account held at an Italian branch pays on the Italian-sited assets.
The rates and thresholds are set by the Consolidated Inheritance and Gift Tax Act, Presidential Decree 346/1990 (TUSD), as reformed. Between direct-line relatives — children, spouses, parents — the tax rate is 4% on the value exceeding a personal exemption of €1,000,000 per heir. Brothers and sisters pay 6% above €100,000 each. All others pay 6% with no threshold, or 8% for unrelated beneficiaries.
From 1 January 2026, following the abolition of the coacervo successorio mechanism under D.Lgs. 139/2024 and its implementing rules, each heir holds a separate €1,000,000 exemption for lifetime gifts and a separate €1,000,000 for inherited assets. Those two pools are no longer combined / merged. A parent who gifted €900,000 to a child in 2020 does not thereby reduce that child's exemption against the inheritance received at death. This separation may represent / can mean significant tax relief for families who made earlier Italian-situs gifts.
This is where the US model creates a dangerous false expectation.
Under US federal estate tax procedure, the IRS issues Form 706 assessments and, where deficiencies arise, a statutory notice of deficiency giving the executor 90 days to petition the Tax Court. In the United Kingdom, HMRC issues an inheritance tax reference and the executor pays before probate is granted, with HMRC checking the calculation afterwards. In both systems, the tax authority plays an active early role.
Italy now works the other way round. The Revenue Agency's role on filing / at filing has been substantially reduced: it does not calculate the tax, it does not issue an upfront demand, and it does not send a notice of assessment before the payment is due. The heir self-assesses, self-calculates, and self-pays — then the Revenue Agency audits, which it may do within three years of the filing date. An audit is not a correction; it is an enforcement action. Interest under Italian tax law runs from the original payment deadline, not from the audit date.
US attorneys managing cross-border estates are trained to await a government bill as the trigger for payment. In Italy since January 2025, that bill does not exist at the filing stage. Waiting for it is not a strategy. It is the mistake.
First error: using the wrong valuation basis. For real property, Italian inheritance tax law permits heirs to self-declare either the market value or the cadastral value — the administrative value produced by a land registry search (visura catastale, the official property register extract). The cadastral value is typically lower than market value and is produced by multiplying the cadastral income by a statutory coefficient. Many US-side advisers, unfamiliar with the Italian land registry, either omit cadastral value calculation entirely or use the wrong coefficient for the property category. The Revenue Agency audits declared values; a systematic understatement triggers a controllo and interest.
Second error: misapplying the separate gift and inheritance thresholds introduced on 1 January 2026. Since the abolition of aggregation, each heir now has two distinct €1,000,000 exemptions — one for lifetime gifts received and one for assets received on death. We regularly see US estate attorneys still aggregating these, which overstates the taxable base and leads either to overpayment or, worse, to incorrect self-assessment filings that the Revenue Agency corrects upwards after audit.
Third error: failing to obtain an Italian tax code (codice fiscale) for every heir before the 12-month filing deadline expires. An Italian tax code is a unique alphanumeric identifier issued by the Revenue Agency and is required to file the declaration and to register the transfer of Italian real property. Non-resident US heirs do not hold one automatically. Obtaining one from an Italian consulate in the United States takes several weeks. If the process is started late — say, month ten after the death — the declaration risks being filed defectively or not filed at all, triggering automatic late-filing penalties.
Fourth error: confusing the two deadlines. The 12-month deadline is for filing the declaration. The 90-day deadline is for paying the tax — and it runs from the date of filing, not from the date of death. An estate that files on day 360 after the death has 90 days from that filing date to pay. An estate that files on day 180 and then waits for a bill has already missed its payment window by month ten.
Debita non praesumuntur — debts are not presumed. The corollary for Italian tax purposes is stark: a payment obligation that arises automatically on self-assessment does not wait to be acknowledged.
Late filing triggers administrative penalties under D.Lgs. 139/2024, calculated as a percentage of the tax due. The base penalty for late filing is 30% of the unpaid tax, reducible under the ravvedimento operoso (voluntary self-correction) mechanism if the estate regularises its position before a formal audit. The reduction depends on how quickly the estate corrects the omission: correction within 14 days of the missed deadline attracts a lower reduction than correction made a year later.
Interest accrues at the statutory rate from the original payment deadline. For large Italian-situs estates — an apartment in Milan valued at €800,000 is not unusual — 30% of a six-figure tax bill, plus accrued interest, can represent tens of thousands of euros that could have been avoided entirely.
The Revenue Agency's Circular 3/E of 2025 (Circolare n. 3/E del 22 aprile 2025, Agenzia delle Entrate) provided interpretive guidance on the self-assessment mechanics and the application of the reformed thresholds. US advisers are not expected to read Italian circulars. An Italian lawyer whose practice covers Italian succession tax is.
Yes, without exception. Every heir named in the declaration, whether resident in Italy or in New York, must hold an Italian tax code before the declaration can be filed. The tax code identifies each heir to the Revenue Agency and is required to record the property transfer in the Italian land registry (Catasto). Without it, the notarial deed of sale (rogito) transferring inherited property to the heirs cannot subsequently be executed.
Obtaining a tax code as a non-resident US citizen requires an application either at the nearest Italian consulate or, in some circumstances, remotely through an authorised representative in Italy. Processing times vary but four to six weeks is a realistic minimum. Factor this into the timeline from week one after the death.
In our files, the most common mistake is not a calculation error at all — it is a sequencing error. The US estate attorney handles everything correctly under American law and only contacts Italian counsel in month nine or ten, after federal estate tax filings are substantially complete. By then, the 12-month Italian clock is nearly spent, there is no time to obtain tax codes, verify cadastral values, or correct the asset inventory before the Italian filing deadline. The Italian declaration is then filed defectively or late, and the self-assessed payment follows defectively or not at all. Italian succession work needs to run in parallel with US estate administration, not after it.
Can a US estate attorney file the Italian inheritance declaration without an Italian lawyer?
Technically the heirs themselves may file, but the declaration requires Italian-language forms, cadastral valuations, and the Italian tax codes of all heirs. In practice, an Italian-qualified lawyer or accountant (commercialista) prepares and submits it. A US attorney without Italian qualification cannot sign or submit documents to the Italian Revenue Agency on the estate's behalf.
Does Italy have an estate tax treaty with the United States?
No. The United States and Italy have not concluded an inheritance or estate tax treaty. A US taxpayer with Italian-sited assets may face taxation in both countries on the same assets, though unilateral foreign tax credit mechanisms under US law may partly offset this. Each case depends on the domicile of the deceased, the nature of the assets, and the heirs' own US tax positions. Italian counsel and US estate counsel should work together from the start.
What is the penalty for missing the 90-day Italian inheritance tax payment window?
The base administrative penalty is 30% of the unpaid tax, reducible under voluntary self-correction if the estate acts promptly before a Revenue Agency audit opens. Interest accrues from the original deadline. Early engagement with Italian counsel and use of the ravvedimento operoso procedure is the only way to limit the damage after the deadline has passed.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
