Are tax reliefs available on gifts (either during the donor’s lifetime or on death) to a spouse, civil partner, or to any other relation, or of particular kinds of assets (eg business or agricultural assets), and how do any such reliefs apply?
As explained in § 5.1. only a 80,724 € allowance applies to gift tax due between spouses and civil partners for each fifteen-year period. They benefit, however, from a total exemption of inheritance tax (see § 5.2.).
Transfer by death of shares of operational companies may, under certain restrictive conditions benefit from a partial inheritance tax exemption amounting to 75%.
Exemptions from inheritance and gift tax are laid down for certain assets. Assets of cultural value that have been recognised as such by the Italian competent authorities prior to the death/gift of the individual are exempt from inheritance and gift tax. A 50% exemption applies to the Italian real estate of cultural value recognised as such after the decease/gift. Italian public debt securities are free from inheritance tax. The exemption applies also to public debt securities issued by EU or EEA Member States.
In order to facilitate the generation transfer of businesses, an exemption from inheritance and gift tax applies to the transfer of businesses and participations in companies and partnerships to spouses or descendants. For participations in companies, the exemption is subject to the additional condition that the recipient receives or reaches a controlling shareholding. The control must be retained for five years following the transfer, otherwise the exemption will be clawed back.
See Question 5 above.
Tax reliefs, further to above mentioned -under question 5- are also made available:
In regards to inheritance
(i) The acceptance of ships, shares or foreign ship-owning entities owning ships of a gross tonnage exceeding one thousand five hundred (1.500) tons.
(ii) Cash deposits to bank accounts with two or more beneficiaries (Joint Account) according to the provisions of Law 5638/1932 and subject to conditions [such as that the account opening contract makes reference to a clause whereby the deposits and account balance of the deceased shall automatically be conveyed to the surviving beneficiaries of the account].
(iii) Agricultural properties and establishments subject to conditions such as that the heirs are spouses/children/siblings/parents/grandchildren of the deceased and exercising personally and mainly agricultural occupation.
There are personal allowances available for transfers on death or by gift which are available every 10 years. E.g. the allowance for spouses is € 500.000, for children € 400.000, for grandchildren € 200.000. There are also allowances for certain assets that may apply, e.g. for the transfer of the family home. Business property relief may apply with up to 100% for transfers of business (including shareholdings) or agricultural assets. However, this is subject to various conditions to be tested in the individual case.
The most important tax reliefs concern the family dwelling and the assets of family owned businesses or shares of family owned companies.
In the Flemish and the Brussels Capital Region, the part of the family dwelling that is inherited by the partner is exempt from inheritance tax. The ‘partner’ is defined as (i) the deceased’s spouse, (ii) his legal cohabitant or – but only in the Flemish Region – (iii) the person with whom he has cohabited de facto for at least three years and with whom he has had a common household.
In the Walloon Region, subject to conditions the first part up to EUR 160.000 in the family dwelling that is inherited by the partner or in direct line is exempted from inheritance tax. The part exceeding EUR 160.000 is taxed at progressive rates that go from 5% to 30% (30% as from EUR 500.000). ‘Partner’ is defined as (i) the deceased’s spouse or (ii) his legal cohabitant.
Only the Walloon Region provides for a specific regime for the donation of the family dwelling. Subject to conditions, a reduced progressive gift tax rate of 1% to 30% applies (30% as from EUR 500.000) to the donation to the spouse or the legal cohabitant.
Family owned businesses and companies
Each region has a specific regime for the donation or inheritance of assets invested in a family owned business or shares of a family owned company, subject to certain conditions. The conditions in the Flemish and Brussels Capital Region are almost identical.
In all three regions, a donation of those assets or shares is tax exempt if all conditions are met. In the Walloon region, the exemption can also apply to shareholder loans to the family owned company.
If inherited, these assets or shares are taxed at a flat inheritance tax rate of 3% or 7% in the Flemish and Brussels Capital Region. In the Walloon Region, the conditions are more strict, but if met, an inheritance tax exemption applies to these assets or shares and even to shareholder loans to the family company.
British Virgin Islands
Real property transfers to a spouse or close relation may be made by way of ‘love and affection’ as the consideration. Such a transfer is taxed at deeply discounted rates – in the case of Belongers the tax is reduced from 4% of the market value to a flat US $5 and for non-Belongers the tax is reduced from 12% of the market value to 5% of the market value.
There are no gift taxes in New Zealand and therefore no applicable tax reliefs exist.
No tax is levied on gifts between ascendants and descendants in direct line (ie parents and children) or between spouses. Otherwise, see question 5.