Among the many and varied detrimental consequences of the COVID-19 pandemic is the impact on the savings and investments of individuals, particularly in relation to estate planning. Financial markets have...
Administration of an Italian estate
If you are a beneficiary, executor or trustee of an estate which includes assets in Italy, we can assist you in the management and winding up of the Italian estate.
Initially, we will advise you on which country’s law is applicable to the succession, by considering the deceased’s nationality, where the deceased was habitually resident at the time of their death, whether the deceased left a Will, and whether it contained a “choice of law” clause.
Our next step will be to identify the beneficiaries and discover whether there is anyone who may have a claim to the estate in accordance to the Italian Civil Code. In Italy, certain relatives are known as “legittimari” and they have the legal right to inherit a specific quota of the estate, regardless of the contents of an existing Will. Spouses and children are the most obvious examples of legittimari but, in certain situations, siblings and other relatives may also have a claim.
However, if English law were to apply to the succession (for example, if an English national elected English law to apply to their succession), then the above would not apply to the Italian assets, and a Will which leaves out a spouse and/or children, for example, would be far less likely to be challenged.
The jurisdiction applicable to the succession is also important if an executor has been nominated or there is a trust in the Will. Executors in Italy do not have as many powers as they would do in commonwealth countries, and trusts are not as common. Therefore, the presence of either in a Will for use in Italy will complicate the administration of the estate if another country’s law has not been chosen to apply to the succession.
We have experience in dealing with such complicated issues and liaise with a network of professionals across Italy who are well-versed in international matters.
Next, we will establish the Italian assets in the estate, including bank accounts, immoveable properties and shares in companies. This involves a search of the Italian Land Registry to identify all immoveable properties in the deceased’s name and contact the banking institutions to obtain a declaration on the value of the assets held at the date of death.
If a Will exists that covers any Italian assets, be it an English Will or an Italian Will, in most cases it must be either published or deposited in Italy by way of a public deed. This should be prepared by and signed before an Italian Notary, together with the Grant of Probate and a translation into Italian, which has been sworn in an Italian court.
We will prepare a bilingual Power of Attorney for you to sign, allowing us to act on your behalf throughout the succession process, sign any deeds of documents as required, and deal with any local authorities and banks.
The Declaration of Succession (“la Dichiarazione di Successione”) is a document detailing the beneficiaries, legatees, the assets inherited and the value of the same. This must be lodged with the Italian Tax Agency (“l’Agenzia delle Entrate”) within one year of the deceased’s death, a process that we will work with the Notary to complete for you.
The inheritance tax due will depend on the relationship of each beneficiary with the deceased, and the value of the assets being inherited. A spouse, for example, will not be liable to any inheritance tax for a value inherited of up to one million Euros and any amount inherited above that amount will be taxed at 4%. These taxes will be calculated by the Tax Agency, following receipt of the Declaration of Succession, and a demand for payment will be sent to the beneficiaries. The total amount due, if any, must be paid within 60 days (although there is the option to pay in instalments, with which we can assist).
Other taxes will have to be paid upon inheritance of immoveable property – the “imposte catastali” and “imposte ipotecarie”. In short, these are due on the transfer of these properties. They are based on the land registry values of the properties, rather than the market values, and we will calculate these and advise you on the amounts due. The “imposte catastali” and “imposte ipotecarie” must be paid before the Declaration of Succession is lodged, as the receipt will be attached to this document.
Finally, once we have received the approved Declaration of Succession from the Tax Agency, we will proceed with closing all the deceased’s bank accounts, selling any shares, distributing the funds to the beneficiaries and transferring any immoveable properties into the beneficiaries’ names.
This information highlights the key points in the process of administering an estate in Italy. It is not a substitute for full legal advice. If you have inherited a property or other assets in Italy or are an executor of an estate including Italian assets, please contact us for further information and legal advice.