Italy Supreme Court clarifies tax rules for large family bank transfers

The Italian Supreme Court (Corte di Cassazione) has clarified the tax implications regarding large bank transfers between parents and children. A recent ruling (ordinanza n. 15315) addressed a case involving the transfer of over 8 million euros from a mother's foreign assets to her daughter.

The court ruled that while routine family support and daily contributions are not taxed, significant transfers lacking clear legal justification or specific documentation can be classified as 'indirect liberalities' (liberalità indirette). In such cases, the Agenzia delle Entrate may apply an 8% tax rate on amounts exceeding the 1 million euro exemption threshold.

Key legal principles established include: - The economic substance of a transaction takes precedence over the description provided in the bank transfer's reason (causale). - To avoid taxation, transfers must be clearly documented as specific, tax-exempt purposes, such as a loan with a repayment obligation or funds specifically designated for a first home purchase. - Without such proof, large sums are treated as taxable gifts rather than mere family assistance.