News & Insights

Italy introduces new tax break for wealthy expats

As long as the charges are paid, the tax breaks can be used for up to 15 years.

The system is open to people of all nationalities, regardless of where they’re domiciled, who have lived outside Italy for at least nine of the last ten years prior to their move. They’ll also need to buy a property and live in the country for 183 days (six months).

In addition to the tax exemption, the taxpayer will have few obligations when it comes to reporting overseas income on their tax return. This privacy is likely to be another big draw of the system.

The news comes in contrast to recent changes to the non-dom regime in the UK, which appears to be intended to have the opposite effect, deterring wealthy individuals instead of enticing them.

Since the beginning of the fiscal year, the government has cracked down on British expats who enjoy tax privileges because of their registered non-domiciled status. British expats returning to the UK – for instance, for work or for their children’s education – will now fall under the UK tax net. They’ll be taxed on income and gains from offshore trusts or companies they own (even if they claim to have made their permanent home abroad).

Plus, anyone who’s lived in Britain for at least 15 of the past 20 years will also have their permanent non-dom status removed and be deemed a UK resident for all tax purposes. They’ll also be subject to inheritance tax. These changes will drum up an estimated £995 million in additional revenue by April 2021.

Italy’s introduction of tax perks just as Britain removes them does not seem to be a coincidence. International law firm Withers suggested that Italy’s new system may be a way of attracting “high net worth individuals looking for a new home following Brexit or deterred by the tightening of rules in the UK”.

Of course, the new Italy non-dom tax incentive will only be of real benefit to the very wealthy, but there are other options, such as setting up a QROPS, available to individuals who want to relieve the amount of tax they pay (as well as experience many other benefits).

Changes to tax rules are happening all the time, and the best way to make sure your savings remain as tax efficient as possible is through proper planning. An experienced financial adviser from Blacktower can help you. If you’re worried about how you may be affected by the new non-dom tax rules introduced in the UK or want to know how you may benefit from the new tax regime in Italy, our wealth management specialists can advise you on the best way to manage your money.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

Other News

Expats say they are being “penalised” for freedom of movement

There are around 4.5 million British people living the expatriate life, and with 1.3 million of these currently residing in the EU, it is easy to understand why there is mounting political pressure for the government to give them full voting rights in the upcoming referendum on the future of British involvement in Europe. After all, they have so much at stake, from their residency and tax status to the future of their expat financial services arrangements.

Read More

Brexit’s Impact on Moving to the EU

Three Years On This month marks three years since the UK officially left the EU, with 52% of the British population voting for Brexit in the referendum on the 23rd of June 2016. As the first sovereign country to leave, the political and social fallout of the decision was significant. Whilst there has been a […]

Read More

Select your country

Please select your country of residence so we can provide you with the most relevant information:

You are currently viewing the Blacktower Financial Management EU website.

You may be looking for the Blacktower United States website.

Blacktower United States > X Stay on this site

Or choose your country.