ITALY Trends and Developments Contributed by: Guglielmo Maisto, Marco Cerrato, Alessandro Bavila and Stefano Tellarini, Maisto e Associati
Tax-Neutrality Regime Upon Contributions of Shareholdings On 13 December 2024, Legislative Decree No 192 was enacted (“Decree 192/2024”), implementing important changes to the tax regime of corporate reorganisations that may also facilitate family busi - ness restructurings. In relation to the private client sector, the most signifi - cant changes are those relating to the tax regime of “tax neutral” contributions of participations. Those rules provide for the computation of the capital gains realised through the contribution on the basis of the increase of the accounting equity of the company benefiting from the contribution (as an exception to the general rule whereby contributions are deemed as disposals of the participations for their fair market value), thus allowing to achieve a de facto “tax neu - trality” regime. That regime is applicable to (i) contributions allow - ing the beneficiary of the contribution to acquire or integrate the control over the contributed company, as well as (ii) contributions of substantial sharehold - ings (ie, shareholdings representing more than 20% of the voting rights or 25% of the capital in unlisted companies) into companies entirely participated in by the contributor. The regime has been amended with the purpose of facilitating the creation of family holding companies, by better specifying and broadening the conditions required for the “tax neutrality” regime to apply. In particular, amongst other things, these rules have been amended to extend the regime also to the con - tribution of participations in non-Italian resident com - panies. In addition, under the new rules, the benefi - ciary of a contribution of a substantial non-controlling shareholding may be participated not only by the con - tributor, but also by his/her family members. Finally, Decree 192/2024 has significantly simplified the conditions relating to contributions of substan - tial shareholdings in holding companies for which the law requires a look-through analysis aimed at assess - ing that the relevant thresholds are satisfied also in
and case law by the Supreme Court. In particular, the Decree implemented, in the IHGT Act, the position endorsed by the Supreme Court and adopted by the tax authorities in Circular No 34 of 2022 (“Circular”), whereby IHGT shall be levied upon a transfer of capital from the trust to the beneficiaries, being the relevant moment when their effective “enrichment” occurs. Upon distribution of capital to the beneficiaries, IHGT is levied with different rates (from 4% to 8%) and an exemption threshold (up to EUR1 million) depending on the degree of kinship between the transferor and the transferee. With respect to the Circular, Decree 239/2024 con - firmed the above approach also in relation to testa - mentary trusts and provided the settlor (in case of inter-vivos trusts) or the trustee (in case of testamen - tary trusts) with the option to voluntarily anticipate the payment of IHGT at the time of addition of assets into the trust. This option could be considered for the purpose of crystallising the favourable IHGT rates and exemption thresholds currently in force. The rules implemented by Decree 239/2024 have left some open issues. Firstly, it is unclear whether, for trusts with non-Italian resident settlors, IHGT applies in the scenario whereby the trustee distributes assets which have become “Italian situs” after the contribu - tion by the settlor. The typical example is the distri - bution of Italian real estate purchased by the trus - tee with liquidity deposited in a non-Italian account. Another open issue concerns the possibility to elect for the option to pay IHGT upon contribution to the trust (introduced by Decree 239/2024) also in case of exempt transfers. For instance, with respect to inter - generational business transfers, this would imply that transfers of controlling participations into trusts may benefit from the exemption also in case the benefi - ciary will ultimately receive from the trustee a partici - pation not exceeding 50% (eg, because part of the participation has been, in the meantime, disposed of by the trustee). Such favourable interpretation seems, however, to be implicitly dismissed on the basis of recent guidelines issued by the tax authorities within the instructions for the compilation of the new IHGT tax return.
312 CHAMBERS.COM
Powered by FlippingBook