The declaration of inheritance in the Italan Law

Introduction

The declaration of inheritance, is a fundamentally important requirement for several reasons.

Although there is often some confusion regarding its function, who is obligated to file it, and which office is responsible, the subject matter is not of particular complexity.

However, it is important to understand the basic features of this institution and how it works il Italy.

The declaration of inheritance

The declaration of inheritance, sometimes referred to as the “report of inheritance,” is mandatory and has a fiscal nature.

Its function is twofold:

– To notify the Revenue Agency that heirs have taken over the position (and assets) of the deceased (who in Italy is also called de cuius, a Latin term); and

– to determine the inheritance taxes that the heirs have to pay, with reference to the Consolidated Text of Provisions Concerning Inheritance and Gift Tax Legislative Decree no. 346/1990.

It is important to remember that the declaration of inheritance does not involve acceptance of the estate.

Acceptance of the inheritance

Acceptance of inheritance, whether express or tacit, has a civil law nature and is a voluntary act by which the heirs irrevocably and unconditionally take over all the rights and obligations that were vested in the de cuius.

The Revenue Agency: competent office

The declaration of inheritance must be filed with the competent Revenue Agency, using the appropriate form.

The competence of the office of determined in relation to the last residence (or tax domicile) of the deceased.

Today the declaration must be submitted telematically through the appropriate channels provided by the the Revenue Agency.

It is worth mentioning that there are special cases:

– submitters residing abroad may use the paper form, in case telematic submission is not possible;

– the deceased was resident abroad: the office of reference is the office of last fixation of known Italian residence;

– the deceased resided abroad with unknown Italian residence: the Rome Office ha the jurisdiction (is the central Revenue Office in Italy);

– the death occurred before October 3, 2006: paper submission is to be made by Form-4; the same form must continue to be used for declarations modifying or substituting the succession.

Who must file the declaration of inheritance

Those required to file the declaration of inheritance are specifically identified as:

– heirs and legatees;

– administrator of the estate;

– receiver of the estate;

– executor of the will;

– parties placed in possession of the estate property;

– trusts.

The exemption from the obligation

Exemption from the obligation to file a declaration of inheritance concerns inheritance devolved to a spouse and relatives in the direct line when the assets of the estate:

– does not include real estate or real property rights (Italian real rights (or rights in rem): definition and classification – The Legal Nook (antonellolawfirm.com)); and

– has a value of less than 100,000.00 euros.

Also exempt from the obligation remain those who:

– have applied for the appointment of a receiver of the estate and are not in possession of the assets of the estate; or

– have renounced the inheritance before the deadline for filing the succession has expired; the same treatment also applies to those who, within the same deadline have renounced the legacy.

In the latter cases, it is necessary to inform the relevant Revenue Agency by attaching the necessary documentation.

When to file the declaration of inheritance

The deadline for filing the declaration of inheritance is 12 months from the opening of the inheritance.

Late submission exposes obligors to penalties ranging from 120% to 240% of the tax. Even the declaration submitted slightly late (30 days after the deadline) exposes to a penalty, albeit halved.

However, it is important to remember that a declaration of inheritance must be filed when modifying acts of the estate are carried out, even if this is done within 12 months of the opening of the succession.

The content and documents

The Consolidated Text clearly indicates the content of the inheritance declaration:

– the identifying data of the subjects: the deceased, those called to the estate, heirs and legatees;

– the total value of the estate;

– the assets of the estate including a description of the assets and/or rights of which it is composed;

– the liabilities and deductible charges.

It is very important to remember that failure to indicate the identifying data of the individuals as well as the composition of the assets of the estate will result in the irregularity of the declaration.

Attention should also be paid to the additional documentation:

– death certificate;

– self-certification on family status;

– copies of documents of heirs and the cuius;

– deeds of provenance of property and related technical documents.

There is then an additional list of documentation to be indicated only if actually present:

– certified copies of the will;

– certified copy of the record of relinquishment of the estate;

– deeds of gift made by the de cuius;

– bank or postal statements;

– employer’s statement indicating accrued benefits;

– minutes of the opening of the safe deposit box;

– declaration of ownership of shares;

– unclaimed disability certificate;

– payment of funeral or medical expenses.

The further importance of the declaration of inheritance

In addition to achieving the purposes we saw earlier, the submission of the declaration of inheritance is also crucial in case the heirs intend to dispose of the property received by inheritance, such as by transferring its ownership or other real right.