Inheritance Law in Monaco for Italian Tax Residents
2026-01-26

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Inheritance Law in Monaco for Italian Tax Residents

When an Italian tax resident owns assets in Monaco or inherits them, two distinct tax systems interact:

Monaco taxes inheritances based on the location of the asset;
Italy taxes inheritances mainly based on the tax residence of the deceased.

Understanding how these two systems work together is essential in order to anticipate tax exposure and structure cross-border succession efficiently.

How Inheritance Tax Works in Monaco

Monaco applies inheritance (and gift) tax only to assets located within the Principality, regardless of the domicile, residence or nationality of either the deceased or the heir.

As a result:

Monaco real estate,
bank accounts held in Monaco,
shares in Monaco companies,
and any assets legally situated in Monaco are subject to Monaco inheritance tax.

The Italian tax residence of the deceased or the heir has no impact on Monaco taxation.

Monaco Inheritance Tax Rates

Relationship	Monaco Inheritance Tax
Parents ↔ Children	0%
Spouses	0%
Siblings	8%
Uncles / Aunts ↔ Nephews / Nieces	10%
Other relatives	13%
Unrelated persons	16%

Accepting or Renouncing an Inheritance in Monaco

Under Monaco law, an heir may:

accept the inheritance in full;
accept under benefit of inventory, limiting liability to the net value of the estate if debts exist;
renounce the inheritance entirely.

These options provide important legal protection, particularly in complex international estates.

Italian Inheritance Tax: When Does Italy Tax Foreign Assets?

The key rule is set out in Article 2 of Italian Legislative Decree No. 346/1990.

If the deceased was resident in Italy at the time of death, Italian inheritance tax applies to all assets transferred worldwide, including those located abroad.
If the deceased was not resident in Italy, Italian inheritance tax applies only to assets located in Italy.

Italy therefore focuses primarily on the tax residence of the deceased, not on the residence of the heir.

Italian Inheritance Tax Rates and Allowances

The main Italian inheritance tax rates and allowances are as follows:

4% on transfers to spouses and direct-line relatives, with an allowance of €1,000,000 per beneficiary;
6% on transfers to brothers and sisters, with an allowance of €100,000 per beneficiary;
6% on transfers to other relatives up to the fourth degree and in-laws up to the third degree, with no allowance;
8% on transfers to all other persons, with no allowance.

Italian Tax Residents Inheriting Assets Located in Monaco

For an Italian tax resident inheriting assets located in Monaco, two principles apply:

Monaco taxes assets located in Monaco, regardless of who inherits them;
Italy determines whether inheritance tax applies based on the tax residence of the deceased.

If the Deceased Was Resident in Italy

Italy taxes the entire estate, including Monaco assets (worldwide taxation);
Monaco taxes assets located in Monaco (territorial rule);
Italy generally grants a foreign tax credit for inheritance tax paid in Monaco, within the limits of Italian domestic law.

If the Deceased Was Not Resident in Italy (e.g. Monaco Resident)

Italy does not tax assets located in Monaco;
only Monaco inheritance tax applies;
the Italian heir pays inheritance tax solely in Monaco.

Legal basis: Article 2 of Legislative Decree No. 346/1990, under which Italy taxes only Italian-situated assets when the deceased was non-resident.

Italian Residents Owning Monaco Assets at the Time of Death

When the deceased was resident in Italy:

Italy taxes the entire estate, regardless of where assets are located;
Monaco taxes assets situated in the Principality;
Italy usually allows a foreign tax credit for inheritance tax paid in Monaco.

This situation is particularly sensitive because Italy and Monaco do not have an inheritance tax treaty.

If the deceased had left Italy and was fully recognised as tax resident abroad (registered with AIRE and with no centre of vital interests in Italy):

Italy taxes only Italian-situated assets;
Monaco taxes Monaco-located assets;
no double taxation applies to foreign assets.

No Inheritance Tax Treaty Between Italy and Monaco

Italy has inheritance tax treaties with only a limited number of countries (France, the United Kingdom, the United States, Greece, Denmark, Israel and Sweden). Monaco is not among them.

Instead, Italy and Monaco are linked solely by a Tax Information Exchange Agreement (TIEA) signed in 2015 and in force since 2016.

Practical consequences:

no treaty protection against double inheritance taxation;
Italy applies its domestic foreign tax credit mechanism;
Monaco applies its inheritance tax independently.

Sources

Monaco – Official Government Sources

Government of Monaco, Inheritance Tax (Droits de succession), Mon Service Public – Direction des Services Fiscaux
Government of Monaco, Inheritance Rights and Succession Procedures, Mon Service Public
Government of Monaco, Renunciation of Inheritance or Acceptance Under Benefit of Inventory, Mon Service Public – General Registry

Italy – Legislative and Tax Authority Sources