Huge News! Donations and the Italian Budget Law 2024

What happened before the 2024 Italian budget law

Prior to the Italian Budget Act 2024, the donation of an asset could be claim by the legitimate heirs of the donor (those to whom the law reserves the right to obtain a share of inheritance or other rights of succession) through two separate actions:

revocation action: the donor or his heirs could, under certain conditions, bring an action for revocation against the donee.
reduction action: the legitimate heirs, moreover, could propose action for reduction of the share of legitimate until the share of legitimate was restored.

It is important to underline that this action of reduction is still possible to date, but the consequences vary greatly if in the meantime the donee has sold the good received by donation to a third person.

But let’s go in order.

What is the revocation claim?

The revocation action is regulated by our Civil Code by art. 800 and following.

The donation can be revoked in two specific cases:

for ingratitude ex art. 801 of our Civil Code: this hypothesis aims to hit particularly serious conduct held by the donee (the one who receives the good or the goods donated) against the donor (the one who gives the good or the goods);
because of the superveniens of children ex art 803 c.c.: when the donor has children or discovers that he has children after the donation. This hypothesis is based on the presumption that if the donor had children, he would not have given the good to others.

In any case, our Civil Code limits the exercise of the revocation action because the action cannot be proposed in case the donation is remuneratory or made in case of marriage.

What is the restitution claim?

The restitution claim is a judicial action by which the return of an asset can be requested by a legitimate who sees his hereditary legitimate rights violated by a donation or by a provision inserted in the will.

The restitution claim must be carried out following the action of the reduction claim, which has the purpose of declaring the ineffectiveness (total or partial) of the testamentary provisions and/or donations that exceed the quota of which the de cuius could dispose.

It must also be clarified that the restitution claim is brought against those who have benefited from the provisions of the good that affect the share of legitimate, therefore also against donors.

The purpose of the restitution claim is to make ineffective the provision that infringes legitimate quotas only to the extent that it is necessary to reinstate these quotas.

Example: if Tizio donates real estate worth 100 to his frind Caius, the son of Tizio who sees his share of legitimate damaged for a value of 50, may well claim restitution action against Caius, but only for the value of 50, that is the value necessary to see reinstated the injury of his share of legitimate.

The restitution claim against third party purchasers of the donated goods

We analyze the case in which the donor against whom the restitution claim has been successfully carried out, has sold the property that has been the subject of a reduction action, to a third party.

Before the 2024 Budget Law, in the event that the donor had sold the goods received by donation to a third party, the injured person, within 20 years of the donation, could have brought a restitution claim against the third purchaser requesting the return of the goods.

It is also very important to note that the acceptance of the reduction action would have also overwhelmed any mortgage registrations made by banks or credit institutions on the property for the purpose of granting a loan.

The 2024 Italian budget law and the new framework for the restitution claim

What changes since 1 January 2024?

The 2024 Budget Law has made a significant change in the matter of donations and restitution.

Starting from this date, in fact, the legitimate heir who sees his share of legitimate injured, can no longer make a restitution claim against the third party who purchased the goods from the donee.

The heir can always act against the donee who has alienated the good.

What is the big change then?

The great novelty is that the heir will have to act against the donee who has alienated the good, but if he is not solvent and therefore does not have the economic capacity to deal with the request for restitution, the heirs cannot claim the return of the goods by the third party who has purchased it from the donee.

Conclusions

In conclusion, the new approach of the 2024 Italian Budget Law aims to make he circulation of gifted good more secure.

With this novelty in fact it will certainly be easier for the third buyer of gifted goods, to ask for and obtain a mortgage by registering mortgage on the same asset, given the impossibility of being requested the restitution of the same by the injured person and the consequent impossibility of seeing the mortgages possibly registered overwhelmed.

However, we must not overlook the problems that this novelty entails for the legitimized injured, who risk seeing their requests not met in the event that the donor who has sold the goods received by donation, is insolvent, and therefore is not able to compensate in money what is due to the injured person acting against him in order to have his share reinstated.