Inheritance in Italy: are tax penalties passed on to heirs?

A person residing in Australia may inherit a

ssets located in Italy.

This is a fairly common situation in families with international ties: a parent or relative who remained in Italy leaves property, bank accounts, investments, or other assets to family members living abroad.

But what happens if the deceased also had tax debts with the Revenue Agency?

This is one of the most frequently asked questions before accepting an inheritance. In particular, many heirs want to know whether tax penalties, which can sometimes be very high, are passed on along with the assets.

Under Italian law, anyone who accepts an inheritance takes over not only the deceased's assets, but also their liabilities.

This principle also applies to tax matters. The law establishes that heirs are liable for tax obligations arising before the taxpayer's death, provided that the taxable event occurred prior to death. Therefore, the following must be paid by the heirs:

• unpaid taxes;

• accrued interest.

Jurisprudence has repeatedly clarified that interest follows the principal tax debt, maintaining an ancillary and compensatory function.

The regime for tax penalties, however, is completely different.

Tax penalties are not passed on to heirs.

The Court of Cassation, with recent order no. 22476/2025, reiterated a very important principle: tax penalties are strictly personal in nature and expire upon the taxpayer's death.

The case involved a taxpayer accused of failing to declare investments

held abroad, with disputes involving several hundred thousand euros in tax penalties. During the proceedings, however, the taxpayer died.

The Supreme Court was therefore called upon to determine whether the proceedings could continue against the heirs or whether the penalties should be considered definitively extinguished.

The Court of Cassation's response was very clear. According to the judges, liability for tax violations is personal and punitive and therefore cannot be transferred to heirs.

Therefore, with the death of the taxpayer, tax penalties automatically expire, the heirs cannot be forced to pay them, and the dispute regarding the penalties becomes meaningless.

Consequently, the heirs cannot be ordered to pay legal costs related to a proceeding that can no longer be decided on the merits due to the taxpayer's death.

For those living in Australia, understanding this distinction is important.

Accepting an inheritance in Italy may entail liability for unpaid taxes and accrued interest, but not for tax penalties resulting from violations committed by the deceased, which cannot become an inheritance burden for family members.

For this reason, relying on a professional in Italy can make a difference: only a concrete analysis of each individual case allows one to determine the actual amounts owed, the possible existence of pending proceedings, the statute of limitations, and the possible consequences of accepting the inheritance under the various jurisdictions involved.