The death of a loved one is probably one of the most intense moment all individuals will go through. However, aside from the human aspects inevitably involved, there is one more aspect to highlight. In fact, it is possible that the deceased left a large debt with the Italian Revenue Agency. Specifically, the presence of various payment orders means that It is not possible – before an investigation – to know whether or not debts are actually higher of the asset.

However, previous orders of payments might also be tax penalties, connected with the non-payment of the orders. So what is the responsibility of the heir in relation to these penalties? Is fiscal responsibility personal in Italy? In other words, are the heirs responsible for the deceased’s tax penalties?

According to a general principle, heirs are not responsible for deceased’s penalties. This means that those penalties cannot be transferred to the heirs. Based on this, the heirs cannot refuse to pay the debt. However, in this specific case, the debt will be reduced by penalties’ amount. This process takes place thorough communication to the Italian Revenue Agency. It is important to notice that, in the context of this procedure, it is a good practice to also challenging the payment orders.

Which are the penalties heirs are not accountable for? For instance, traffic penalties cannot be transferred over heirs. Then, what happens if the deceased had started to reschedule the tax penalties? Even in this case, heirs cannot be accountable for the non-payment of the installment of the tax penalty. Therefore, in the event the death occurs during a rescheduling plan of a tax penalty, the heirs are not accountable.

Should you need any advice or assistance on tax and revenue matters, please do not hesitate to contact us. VGS professionals have the skill and the expertise to assist you in the context of tax payments, probate, and will.