Gift tax in Sicily

Application of Italian gift tax law

The regulations on Italian gift tax apply if

• the testator is resident in Italy for tax purposes or
• the assets to be transferred are located in Italy.

As the regulations on Italian gift tax change rapidly from time to time, the regulations at the time of the testator’s death are decisive.

General regulations on gift tax

The gift tax is 4% for assets with a value exceeding 1,000,000 € per beneficiary.

General allowances

The tax-free amounts depend on the relationship between the recipient and the donor. The allowances are as follows:

• Spouses, ancestors and children = 1,000,000 €
• Collateral relatives = 100,000 €
• Others = 0 €
• There are special rules for disabled persons. They receive a flat-rate allowance of 1,500,000 € regardless of their relationship to the donor

Tax obligations for gifts of real estate in Sicily

In addition to gift tax, the following additional taxes apply to real estate:

• Transfer tax (imposta ipotecaria)
• Cadastral tax (imposta catstale)
• Registry tax (imposta di registro)
• Value added tax (imposta sul valore aggiunto – IVA)
• Mortgage tax (imposta ipotecaria)
• Real estate transfer tax (imposta sugli acquisti immobiliari)

German gift tax

If the donor or the donee was resident in Italy for tax purposes or if the asset was located in Italy, German inheritance tax may be payable in addition to Italian inheritance tax. In these cases, double taxation can often be avoided or mitigated by offsetting.