Recently, the Italian Supreme Court clarified an issue concerning the taxation of donations between parents and children, particularly those made informally or through indirect payments, such as purchasing a house. The ruling no. 7442 on March 20, 2024, definitively established that such donations are not subject to donation tax unless they are formally registered.

The decision criticized Circular 30/2015 of the Italian Revenue Agency, describing it as ‘unshareable’, ‘imprecise’, and ‘incomplete’, because it imposed taxation on all gifts between living persons not accompanied by a registered written deed. However, the Court emphasized that only donations resulting from registered acts or those voluntarily declared by the taxpayer are taxable.

For indirect donations, such as those made through purchase deeds where the parent pays the price on behalf of the child, the Court reiterated that there is no obligation to register the deed as a donation unless specific conditions exist. In particular, the tax applies only if the donation is valued over one million euros and if it is revealed by the taxpayer during a fiscal inspection.

The decision establishes a clear distinction: not all indirect donations emerging from registerable deeds are automatically subject to taxation. The law allows taxpayers the option to voluntarily register such acts as donations, and the tax administration can impose taxes only if the value exceeds one million euros and the donation is declared in audit proceedings.

The Supreme Court’s ruling brings significant clarification for many taxpayers making transfers of assets informally or indirectly. This represents a tax relief, allowing parents to support their children without the fear of heavy tax burdens, unless specific criteria requiring the registration of the donation are met. This interpretation offers greater flexibility and fewer bureaucratic complications for substantial donations or in formal contexts.