Recent Interpretations by the Italian Tax Authorities on the Inheritance and Gift Tax Exemption under Article 3(4-ter)
A family business may be transferred to children and/or the spouse without triggering inheritance or gift tax. However, Article 3(4-ter) of the Italian Consolidated Inheritance and Gift Tax Act (Legislative Decree No. 346/1990) requires the successors, for a period of five years, to alternatively:
continue the business activity, where a business as such is transferred;
maintain control pursuant to Article 2359 of the Italian Civil Code, where shares in capital companies are transferred;
retain ownership, where interests in partnerships are transferred.
Legislative Decree No. 139/2024, which entered into force in 2025, significantly amended the provision in several key respects. The exemption now also applies where an already existing controlling interest is increased; for capital companies, maintaining control is sufficient regardless of the type of activity carried out — thus, based on the wording of the provision, potentially extending the benefit also to pure holding companies and companies merely holding assets (although this issue remains debated). For partnerships, it is no longer necessary to demonstrate continuation of the business activity. Furthermore, the benefit has been extended to interests in foreign companies resident in EU or EEA countries, or in countries ensuring an adequate exchange of information.
Given the interpretative uncertainties arising from the recent reform, the exemption has been the subject of several rulings issued by the Italian Tax Authorities, which are briefly summarised below.
The 2026 Clarifications: From “Safe” Reorganisations to “Substantive” Control
With Ruling No. 11 of 20 January 2026, the Italian Tax Authorities confirmed that the transformation of direct control into indirect control over the company subject to an exempt transfer by way of gift or succession does not, in principle, result in the loss of the benefit, provided that the beneficiaries continue to hold control — even indirectly — over the original company.
With Ruling No. 109 of 27 May 2026, the Italian Tax Authorities instead established a more restrictive approach regarding the aggregation of shareholdings. A 35% interest inherited by three heirs jointly, who already individually owned additional shares in the same company, cannot be combined with those existing interests for the purpose of achieving legal control. Since these are separate legal positions, the jointly owned inherited stake remains a minority interest and, as such, cannot benefit from the exemption under Article 3(4-ter).
The most significant line of interpretation, however, concerns the very notion of “legal control”. With Ruling No. 115 of 4 June 2026, referring to Supreme Court Order No. 6616 of 19 March 2026, the Italian Tax Authorities stated that the control required by the provision cannot be assessed solely on the basis of a formal criterion. A case-by-case analysis is required to determine whether statutory provisions or shareholders’ agreements granting special rights to the transferor may weaken — or even eliminate in substance — the control formally transferred to the beneficiary. In such circumstances, regardless of whether the transferred shareholding exceeds 50% of the share capital, the exemption would not apply.
The same principle was applied again a few days later in Ruling No. 143 of 13 July 2026. The case concerned a family agreement through which an entrepreneur transferred to his son the bare ownership of 95% of a family holding company, together with the related voting rights: apparently, a full controlling position. However, the company’s articles of association granted the father the right to be appointed as director and Chairman of the Board, voting powers in the shareholders’ meetings of subsidiaries on key matters, approval rights over future transfers, and a qualified majority requirement of 96% to amend the articles of association — a threshold that the son, despite holding 95% of the voting rights, could not reach independently.
The Italian Tax Authorities held that these rights, considered as a whole, substantially deprived the transferred interest of effective control. Consequently, the exemption was denied and ordinary gift tax was deemed applicable.
The Latest Clarification: Ruling No. 152 of 31 July 2026
A few weeks later, the Italian Tax Authorities addressed the issue again with Ruling No. 152 of 31 July 2026, this time providing a favourable outcome for the taxpayer and offering significant operational guidance for those managing post-transfer reorganisations.
The case concerned a taxpayer who, between 2011 and 2025, had become the owner of 100% of a parent company through a combination of purchases and gifts received from his parents, the most recent of which benefited from the exemption under Article 3(4-ter). With the final gift, received in 2025 and representing 35% of the share capital, the taxpayer increased an already existing controlling position (65%) to full ownership, undertaking to maintain it until June 2030.
The taxpayer then intended to contribute at least 70% of the shares into a personal holding company under the Italian “controlled realisation” regime and sell a minority stake between 20% and 30% to third parties.
The Italian Tax Authorities clarified that neither the contribution of the shares into a holding company nor the subsequent sale of a minority stake would, in themselves, result in the loss of the exemption. The rule requires the maintenance of the controlling position (including indirect control through the acquiring holding company), rather than the obligation to retain each individual shareholding originally received under the exemption.
The Tax Authorities also recalled that, if the gifted shares were sold within five years, Article 16(1) of Law No. 383/2001 would still apply. This anti-avoidance provision requires the payment of substitute tax on capital gains as if the gift had never occurred — a separate restriction that must be considered when planning the transaction.
Summary
The 2026 framework shows that the Italian Tax Authorities maintain a flexible approach towards reorganisations aimed at facilitating generational transfers — including contributions into holding companies, transitions from direct to indirect control, and partial disposals — provided that the substance of control remains with the beneficiary who received the exemption.
At the same time, the Authorities are increasingly scrutinising the genuine nature of such control, looking beyond ownership percentages and examining whether contractual or statutory rights may effectively undermine it.
For professionals advising entrepreneurial families, the practical message is clear: the decisive factor is not merely the percentage transferred, but the actual powers granted by that interest. In the case of transfers of a business as such, the effective continuation of the business activity remains a fundamental requirement.
