Italy inheritance tax exemptions for business transfers and state bonds

Under the Italian Consolidated Law on Successions and Donations (Legislative Decree No. 346 of October 31, 1990), specific assets are exempt from inheritance tax to promote economic continuity and national savings.

One major provision allows for the tax-free transfer of companies, business branches, shares, or stocks to a spouse or direct descendants. To qualify for this exemption, heirs must maintain operational control or continue the economic activity for a minimum period of five years. Failure to meet this requirement results in a 30 percent administrative penalty plus interest.

Additionally, EU and EEA government bonds have been exempt from inheritance tax calculations since 2014. Other exclusions include certain uncollectible credits, provided they are being contested in civil court or have been transferred to the State prior to succession. The law also provides mechanisms to protect individual labor earnings within legal marital communities, which may be taxed at a reduced rate of 50 percent.