Italian Inheritance Tax: A Guide for UK Nationals

A UK national who dies leaving a Tuscan villa worth €800,000 and a London flat worth £1.2 million faces two separate inheritance tax systems with completely different mechanics. Italy taxes each child at 4% on the value of their share above a €1 million per-beneficiary allowance — likely zero tax due on the villa. The UK applies a flat 40% to the worldwide estate above the combined £500,000 of nil-rate bands — roughly £280,000 to £400,000 on the same combination of assets, depending on how the residence nil-rate band applies. The two systems do not double up: the 1966 UK-Italy estate tax convention gives the UK a credit for Italian tax paid on Italian-located assets. But the credit only neutralises one slice of the bill, and the April 2025 reform of UK IHT changed who pays UK tax on Italian assets in the first place. This guide is the practical version of how the two systems actually interact in 2026.

Quick answer

Italian inheritance tax is structured by relationship and asset location; UK IHT is structured by residence (since April 2025) and applies a flat 40% above the nil-rate bands. Where the same Italian-located asset falls under both regimes, the UK-Italy 1966 estate convention provides a credit so you do not pay twice.

Italian rates by beneficiary: Spouse, children, grandchildren, parents — 4% above €1 million per beneficiary. Siblings — 6% above €100,000. Other relatives (up to 4th degree) — 6%, no allowance. Unrelated heirs — 8%, no allowance. Heirs with certified disability — €1.5 million allowance regardless of relationship.
Italian scope: If the deceased was Italian-resident, worldwide assets are taxable. If non-resident, only Italian-located assets (real estate, Italian bank accounts, Italian business interests).
UK scope (April 2025 reform): Long-term residents — UK-resident in 10 of the last 20 tax years — owe UK IHT on worldwide assets. Otherwise, UK IHT applies only to UK-located assets. The old domicile-based regime is gone.
UK-Italy 1966 estate convention: Italian-located real estate is taxed by Italy first; the UK gives a credit for Italian tax paid on the same asset. You pay the higher of the two effective rates, not both.
Forced heirship workaround: Italian legittima reserves 50-75% of the estate for close family. EU Regulation 650/2012 (Brussels IV) lets a UK national habitually resident in Italy elect English law in their will (professio iuris), bypassing forced heirship entirely.
Filing: Dichiarazione di Successione via Modello SUC, electronically, within 12 months of death. Cadastral and mortgage taxes (2% + 1% of cadastral value, minimum €200 each) self-paid by F24 at filing. Inheritance tax itself is assessed by the Agenzia delle Entrate and paid within 60 days of notice.

Italian Inheritance Tax: How It Works for UK Nationals

Italy's Imposta di Successione applies to each beneficiary, not to the estate as a whole. That single mechanic distinguishes the Italian system from the UK regime and explains why effective rates in Italy are far lower for families. A married couple in the UK with two children, leaving a £2 million combined estate, will typically pay £400,000+ in IHT. The same couple, if Italian-resident leaving the equivalent in Italian-sited assets, would owe little to nothing — the two children each get a €1 million allowance applied to their share.

Rates and Allowances by Relationship

Beneficiary	Allowance	Tax rate on excess
Spouse, children, grandchildren, parents, grandparents	€1,000,000 per beneficiary	4%
Heir with certified disability (any relationship)	€1,500,000	4% / 6% / 8% (by relationship)
Siblings	€100,000 per beneficiary	6%
Relatives up to 4th degree (e.g. cousins, aunts/uncles)	None	6%
Unrelated beneficiaries (friends, partners not in civil union)	None	8%

Civil union partners (unioni civili) are treated as spouses since 2016. Cohabiting partners without a civil union have no allowance and are taxed at 8% — a trap UK nationals living together long-term in Italy without formalising should know about.

How Italian Real Estate Is Valued for Inheritance

Italian real estate is valued for inheritance purposes on the cadastral value (valore catastale), not market value. The cadastral value is computed by multiplying the rendita catastale (cadastral income figure from the land registry) by a statutory multiplier:

Primary residence (prima casa): rendita catastale × 115.5
Other residential property: rendita catastale × 126
Building land (terreni edificabili): market value (no multiplier)

For most UK holiday homes in Italy, the cadastral value is typically 30-50% of market value. A £400,000 Tuscan villa often has a cadastral value of €150,000-200,000 for inheritance purposes. The Italian inheritance tax base is materially smaller than the asset's real worth.

For more on how cadastral values are determined and verified, see our guide on understanding property records in Italy.

Italian Scope: Resident vs Non-Resident Deceased

Italian inheritance tax follows the deceased's residence, not the heir's:

Deceased was Italian tax-resident: Inheritance tax applies to worldwide assets of the estate.
Deceased was non-resident: Inheritance tax applies only to Italian-located assets — Italian real estate, Italian bank accounts, shares in Italian companies, Italian business interests.

Italian tax residence for the deceased is determined by the same criteria that apply to living taxpayers: registration with the Italian Anagrafe (or absence from AIRE), habitual abode, or centre of vital interests in Italy, or physical presence for more than 183 days in the calendar year of death. See our breakdown of establishing tax residency in Italy for the full residency test.

For a UK national with a holiday home in Italy who remains UK-resident until death, only that Italian property (and any Italian accounts) is in scope for Italian inheritance tax. The London assets, the UK pension, and the UK ISA are outside Italian jurisdiction.

Worked Example: A UK Family Inheriting a Tuscan Villa

A UK-resident father dies leaving a villa in Chianti with a market value of €800,000 (cadastral value €220,000), plus an Italian bank account of €40,000. His estate is split equally between his two adult children.

Italian inheritance tax computation:

Each child's share: €130,000 cadastral-based (€110,000 property + €20,000 cash)
Each child's allowance: €1,000,000 (parent-to-child)
Each child's taxable amount: €0
Italian inheritance tax due: €0

What is actually paid in Italy at filing:

Imposta ipotecaria (mortgage tax): 2% × €220,000 = €4,400
Imposta catastale (cadastral tax): 1% × €220,000 = €2,200
Total Italian transfer cost: €6,600 (about 0.8% of market value)

The mortgage and cadastral taxes are mechanical transfer fees, not inheritance tax. They apply regardless of allowances and are paid by F24 at filing.

UK Inheritance Tax After the April 2025 Reform

The UK rebuilt its IHT system on 6 April 2025. The old concept of "domicile" — which had governed UK IHT on worldwide assets since 1894 — was abolished. The replacement is a residence-based system. For UK nationals planning a move to Italy, or already living there, the change is consequential.

The New Long-Term Residence (LTR) Test

UK IHT on non-UK assets now applies only to "long-term residents": individuals who have been UK-resident in at least 10 of the last 20 UK tax years. The trigger:

Newly arrived in the UK: Free from UK IHT on non-UK assets for the first 10 years.
Long-term UK resident leaving the UK: Caught by UK IHT on non-UK assets for an additional 3-10 years after departure, depending on tax years of UK residence before departure.

For a UK national moving to Italy in 2026 after 30 years in the UK: UK IHT on their Italian assets continues for the next 10 years, then drops off. Italian assets accrued after the 10-year tail are outside UK IHT.

For a UK national who never lived in the UK long-term: only UK-sited assets are exposed to UK IHT.

UK Rates and Bands (2026 Figures)

Nil-rate band (NRB): £325,000 — frozen until April 2030.
Residence nil-rate band (RNRB): £175,000 — applies when the main residence is left to direct descendants. Tapered if the estate exceeds £2 million.
Combined per person: £500,000.
Transferable to surviving spouse: Up to £1 million for a couple if both bands are unused.
Rate above bands: 40% (36% if 10%+ of estate left to charity).
Spouse-to-spouse transfers: Unlimited and tax-free.

From 6 April 2027, most unused pension funds and death benefits from registered pension schemes will fall into the IHT estate — a separate reform, but one UK nationals with substantial SIPP balances need to factor in.

How the UK-Italy 1966 Estate Convention Works

The Convention between the United Kingdom and Italy for the Avoidance of Double Taxation with respect to Estate Duties, signed 15 February 1966 and still in force, governs which country has primary taxing rights and how credits work.

The mechanics for an asset taxed by both systems:

Italian-situated real estate: Italy taxes first as the country of situs. UK gives a credit for Italian inheritance tax paid against UK IHT on the same asset.
Other Italian assets (bank accounts, shares of Italian companies): Italy taxes if deceased was Italian-resident or if the asset is Italian-sited. UK gives a credit if the deceased was UK-resident.
UK-situated assets (real estate, UK shares): UK taxes first. Italy gives a credit if the deceased was Italian-resident and the asset is also in Italian scope.

The credit is capped at the lower of the two taxes. You pay the higher of the two effective rates on the asset, not the sum.

Worked Example: Treaty Credit in Action

A UK-resident long-term resident dies leaving a Sicilian apartment worth €600,000 (cadastral value €165,000) to a niece. The niece is in the 4th-degree category — no Italian allowance, 6% rate.

Italian inheritance tax:

Tax base: €165,000 (cadastral)
Italian tax: 6% × €165,000 = €9,900
Plus ipotecaria + catastale (€3,300 + €1,650) = €14,850 total Italian cost

UK inheritance tax (LTR scenario):

Asset value for UK IHT: market value €600,000 ≈ £510,000
UK IHT on this slice (above bands): 40% × £510,000 = £204,000
UK gives credit for Italian inheritance tax paid: £204,000 − £8,500 (≈€9,900 converted) = £195,500 net UK IHT

The total cross-border bill on the Sicilian apartment: roughly £204,000 (€240,000) — 40% of market value, not 6%, because the UK is the higher-rate jurisdiction here. The Italian system's favourable treatment is wiped out by UK IHT for a long-term UK-resident deceased.

The strategic implication: for UK nationals planning to remain UK-resident until death, Italian-sited assets do not enjoy Italian inheritance tax rates effectively. Italian rates dominate only when the deceased is no longer a UK long-term resident (i.e., 10+ years into Italian residence with the UK tail expired).

Italian Forced Heirship and the Brussels IV Workaround

Italian succession law contains forced heirship (quota di legittima) — a reserved portion of the estate that cannot be freely disposed of by will. Close family members are guaranteed a minimum share:

Spouse alone, no children: ½ of estate reserved.
Spouse plus one child: ⅓ to spouse, ⅓ to child, ⅓ freely disposable.
Spouse plus two or more children: ¼ to spouse, ½ split among children, ¼ freely disposable.
Children only (no surviving spouse): ½ if one child, ⅔ split if multiple.
Spouse plus ascendants, no children: ½ to spouse, ¼ to ascendants, ¼ freely disposable.

A will that violates legittima can be challenged by the protected heir and partially reduced (azione di riduzione). For UK nationals used to English-law testamentary freedom — where you can leave everything to whomever you want — this is a significant constraint.

The Professio Iuris Election Under EU Regulation 650/2012

The EU's Succession Regulation (Brussels IV) — Regulation 650/2012, in force since 17 August 2015 — gives non-Italian nationals habitually resident in Italy the right to elect their national law to govern succession. The election (professio iuris) is made in the will.

A UK national habitually resident in Italy can include a clause electing English law (or Scottish law) to govern their succession. The effect: Italian forced heirship rules do not apply. The estate is distributed according to English-law principles of testamentary freedom.

The UK itself never joined Brussels IV (the UK opted out, along with Ireland and Denmark). But the regulation is binding on Italian courts and the Italian notaio handling the succession, so the election works in practice — provided the will is valid under English law and contains the explicit professio iuris clause.

This is among the most underused estate planning moves for UK nationals in Italy. Without it, your Italian villa cannot simply go to a chosen heir if you have a spouse and children with forced heirship claims.

Filing the Italian Succession Declaration

The Dichiarazione di Successione must be filed with the Agenzia delle Entrate within 12 months of the date of death. Since 2017 the declaration is filed electronically via Modello SUC (formerly Modello 4), submitted through the Agenzia delle Entrate portal directly or by an authorised intermediary (commercialista, notaio, or CAF).

What Goes Into the Declaration

Full inventory of assets (real estate by cadastral data, bank accounts, shares, vehicles, business interests).
List of beneficiaries with their codice fiscale — non-resident heirs without an Italian tax ID must obtain one first; see our guide on the Italian codice fiscale.
Outstanding debts of the deceased to be deducted from the gross estate.
Documentary evidence: death certificate, will (if any), property deeds, bank statements.

What's Paid at Filing — and What Comes Later

Self-paid by F24 at filing:

Imposta ipotecaria: 2% of cadastral value of inherited real estate, minimum €200.
Imposta catastale: 1% of cadastral value, minimum €200.
Imposta di bollo and various nominal duties.

Assessed by the Agenzia delle Entrate after filing:

Imposta di successione itself — payable within 60 days of notice of assessment, also via F24.

For details on F24 mechanics, see our step-by-step guide to F24 payments.

Prima Casa Treatment

Inherited real estate that the heir intends to use as their primary residence benefits from reduced imposta ipotecaria and catastale of €200 each (flat, not percentage) — provided the heir satisfies the prima casa conditions: ownership of no other principal residence in Italy, residence registration in the same comune within 18 months, no recent benefit of prima casa relief elsewhere.

This is a meaningful saving for a UK adult child inheriting an Italian property and planning to live in it: €400 fixed instead of 3% of cadastral value.

Exemptions Worth Knowing

Several asset classes are partially or fully exempt from Italian inheritance tax:

Italian government bonds (BTP, BOT, CCT, CTZ), and EU equivalents — exempt.
Family business interests transferred to spouse or descendants, provided the heirs continue operations for at least 5 years — exempt (subject to specific conditions).
Life insurance proceeds paid directly to the named beneficiary — outside the inheritance estate, exempt from imposta di successione. (Important: the policy must be structured correctly under Italian rules.)
Vehicles registered with PRA — outside the inheritance tax base (subject to a separate registration transfer).

UK nationals with substantial Italian estates can structure pre-death holdings around these categories to reduce the future inheritance base.

Lifetime Gifts (Donazioni) — A Parallel Regime

Italian gift tax (imposta sulle donazioni) uses the same rates and allowances as inheritance tax — 4%, 6%, 8% with the same per-beneficiary thresholds. A €1 million lifetime gift from a parent to a child is tax-free in Italy.

But two things differ from UK practice:

No 7-year rule. Unlike UK potentially exempt transfers, a gift made years before death does not progressively fall out of the inheritance scope. Italian gift tax is owed at the time of the gift.
Use of allowances by gift consumes them for inheritance. The €1 million per-beneficiary allowance is shared between lifetime gifts and final inheritance. A €500,000 gift to a child today reduces the inheritance allowance to €500,000 at death.

The strategic difference: in the UK, surviving 7 years past a gift makes it fully outside IHT. In Italy, a gift is taxed (or absorbed by allowance) at the time it happens, with no progressive escape over time.

Planning Moves That Actually Work for UK Nationals

Add a professio iuris clause to your will if you live in Italy. Elect English (or Scottish) law to govern succession under Brussels IV. This removes Italian forced heirship from the equation. Do not assume your UK will alone is enough — the election must be explicit.
Time your move to Italy with the UK 10-year LTR tail in mind. UK IHT on Italian assets continues for up to 10 years after you leave the UK. Major asset transfers and gifts during the tail period may still trigger UK IHT.
Use the prima casa relief for inheriting children. If an adult child plans to live in the inherited Italian property, the €400 flat mortgage/cadastral cost is dramatically lower than the 3% percentage version.
Coordinate gifts across both systems. UK PETs (potentially exempt transfers) and Italian donazioni operate differently. A gift that is tax-efficient in one system may not be in the other. Structure gifts that draw down Italian allowances while keeping the UK 7-year clock running.
Confirm civil union or marriage status before relying on spouse treatment. Long-term cohabitation without unione civile or marriage means the surviving partner has no allowance and pays 8% in Italy.
Get the codice fiscale for all heirs early. The succession declaration cannot be filed without it. For non-resident UK heirs, this is often the first hurdle.
Use the Italian flat-tax regime for foreign retirees if applicable. The 7% flat tax in southern Italian small comuni (see our updated guide) does not directly reduce inheritance tax, but it interacts with overall planning when the deceased was a flat-tax-regime retiree.

For a broader picture of Italian inheritance rules applicable to all foreign nationals, see our general guide on inheritance taxes in Italy.

Common Mistakes UK Nationals Make

Assuming the old non-dom rules still apply. They don't. The April 2025 reform replaced domicile with residence. UK IHT on non-UK assets now depends entirely on the LTR test.
Assuming the UK-Italy convention covers gifts and lifetime transfers. The 1966 convention is an estate duty treaty — it covers transfers on death. It does not cover lifetime gifts. Italian donazioni tax and UK PET treatment operate independently.
Filing late or missing the 12-month deadline. Penalties for late filing start at 120% of tax due and compound with interest. Italian succession declarations are not optional even when no tax is owed (e.g., when the estate is entirely below allowances).
Forgetting bank account release. Italian banks freeze accounts of the deceased and require evidence of the succession declaration plus proof of identity of heirs (with codice fiscale) before releasing funds. This routinely surprises UK heirs expecting quick access.
Mis-stating cadastral data. The valore catastale is computed from the rendita catastale — and the latter is the figure shown in visura catastale documents. UK heirs should pull a fresh visura before filing; outdated values cause discrepancies and assessment delays.
Assuming UK probate is enough. UK probate is not recognised directly in Italy. A separate Italian succession process (including the declaration and any required notaio deed for real estate transfer) is required.

File Your Italian Succession Declaration With Confidence

Cross-border inheritance involves two tax systems, two legal traditions, and a 1966 treaty designed before any of the current asset classes existed. Most of the difficulty is mechanical: getting cadastral data right, obtaining codice fiscale for non-resident heirs, filing within the 12-month window, and structuring the F24 payments. The decisions that matter — professio iuris election, treaty credit claiming, prima casa relief for inheriting children — depend on getting the facts straight before death, not after.

ItalianTaxes.com provides a technology-driven platform to file your Italian succession declaration online, calculate Italian inheritance tax against UK liabilities, claim the UK-Italy treaty credit correctly, and stay compliant with the 12-month deadline. Our platform is built for expats, non-residents, and international heirs — in English.

Ready to handle Italian inheritance correctly? Create your free ItalianTaxes.com account and file with confidence.

This article is for informational purposes only and does not constitute personalized tax, legal, or financial advice. Italian tax rules change frequently — always confirm your specific situation against current guidance from the Agenzia delle Entrate or consult a qualified Italian commercialista.