Inheritance Tax in Italy

G

Gigi Buffon

Registered User
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Hello

I’m Italian and lived in Ireland for 9 years but plan to move back to Italy sometime between 2019 and 2020:

My aunt unfortunately passed away in Italy in early January: she had no family and left a total of around 600.000€ that me my brother and a cousin will inherit at 33% each: we are the only heirs. So roughly 200.000€ each. For reference these are the thresholds in Italy with regards to gifts and inheritance

- Parent to sons: up to 1 million per son/daughter is tax free. Everything that is above 1 million is taxed at 4%

- Brother to brother: up to 100.000 € tax free everything above 100.000€ it taxed at 6%

- Uncle/aunt to nephews there is no tax free threshold. Everything is taxed at 6%

In my situation since I’m tax resident in Ireland it looks like I would have to pay the difference between the tax in Italy at 6% and the inheritance tax in Ireland set at 33%

Since I plan to move back to Italy sometime at the end of 2019 or early 2020 in order not to pay the draconian Irish tax I was thinking of refusing my part of inheritance and leave everything to my brother.

He will pay the 6% tax to the Italian taxman on the 400.000€, then in 2019 or 2020 once I return he will gift me the 200.000€ minus 6% and I will pay 6% on whatever is above 100.000€. Still a huge saving compared to the crazy high Irish inheritance tax. Is this a valid option ? In Ireland I own nothing: no car no house etc. and once I move back I will return to Ireland only for holidays but not to live here.

Thanks
Gigi
 
Hi Ilgon,
I don't know. I thought that we could go to the notary public and I would be able to refuse my part and shift it to my brother only but honestly I'm not sure if it's possible or it has to be split between my brother and my cousin. I will find out.

Thanks Noproblem I will check about the irish allowance. To be honest I would be happy to pay the tax in Ireland and make things simpler if the tax was only a few percentage points above Italy , but after checking it looks like it's roughly 5 times higher. So for every one euro tax that I would pay in Italy here I would pay five. My aunt would turn in her grave if she knew that a good chunk of her wealth would end up feeding the Irish taxman. She would very likely have had a lot of difficulties even at pinpointing where Ireland is located on the map.

Thanks for the feedback so far.
Gigi
 
It's not your aunts fault that you decided to work in Ireland, so put that out of the situation you find yourself in. If I was you i'd contact a good accountant whose speciality is in this sphere.
On your notion of leaving it to your brother? Be very careful, money is a quare item, it does things to folk! One thing for example, suppose something was to suddenly happen to the brothers "health"?
 
He is irish resident ordinarily resident but not Irish domiciled. Is he not subject to remittance basis of CGT. It is not an Irish asset. If he is going back to Italy could he leave the money in savings account for his remaining time in Ireland therefore not pay the Irish tax as the gain never comes to Ireland.
 
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