Generational transfer through a family holding company in Italy

What a family holding company is for in succession planning

The holding company owns the controlling stakes in the operating companies. In a generational transfer it has three functions:

• governance: decisions on the group are taken in a single shareholders' meeting, with by-law rules on appointments, majorities and dispute resolution;
• unity of control: the children receive shares in the holding, not fractions of each company, so control of the operating companies is not dispersed;
• separation of family wealth and business: dividends from the operating companies can stay in the holding and be reinvested, apart from personal assets.

Contributing shares to the holding: controlled realisation (Article 177 TUIR)

Contributing shares is a taxable disposal, but Article 177(2) TUIR treats as the disposal value the increase in net equity recorded by the receiving company. If the holding records the shares at the contributor's tax cost, no gain arises: this is why it is called controlled realisation rather than tax neutrality.

The rule applies when the holding acquires legal control of the contributed company (Article 2359(1)(1) of the Civil Code) or increases its controlling stake. Without control, paragraph 2-bis applies, as rewritten by Legislative Decree 192 of 13 December 2024 for contributions made from 31 December 2024. It requires:

• qualifying shareholdings, i.e. more than 20% of the votes or 25% of the capital for unlisted companies;
• a holding, existing or new, owned only by the contributor or, for an individual, by the contributor and their family members (Article 5(5) TUIR).

If the contributed company is itself a holding, the thresholds are tested on its subsidiaries (paragraph 2-ter, as interpreted by Article 5 of Legislative Decree 192 of 18 December 2025). For contributions under paragraph 2-bis, a holding that sells the shares obtains the participation exemption only after sixty months (paragraph 2-quater). Legislative Decree 148 of 7 August 2026 (Article 9) clarified the case of shares standing at a loss: the regime applies even if the disposal value is below the tax cost, but if it is also below fair market value, the disposal value is the lower of tax cost and market value. The rule applies to contributions from tax year 2026 for calendar-year taxpayers and also to earlier contributions made from 31 December 2024, provided the tax returns were prepared accordingly.

Financial or industrial holding, dividends (Article 89 TUIR) and participation exemption (Article 87 TUIR)

Article 162-bis TUIR distinguishes financial holding companies, which mainly hold stakes in financial intermediaries, from non-financial holding companies (industrial holdings), which hold stakes in other companies. The test is whether these stakes exceed 50% of total assets in the last approved accounts. The classification affects, among other things, the regional tax IRAP.

For a holding subject to corporate income tax (IRES):

• dividends from subsidiaries are 95% excluded from taxable income (Article 89);
• capital gains on the sale of shareholdings are 95% exempt (Article 87, participation exemption) if the shares have been held for at least twelve months, are recorded as financial fixed assets, the subsidiary is not in a low-tax jurisdiction and carries on a business, conditions that must be met over several tax years (Article 87(2)). For stakes in holding companies, the business test is applied to their subsidiaries.

The 2026 Budget Law (Law 199/2025) had restricted these benefits with minimum shareholding thresholds. Decree-Law 38 of 27 March 2026, converted by Law 88 of 22 May 2026 (Article 11), repealed the thresholds with effect from 1 January 2026. Profits distributed to family members are taxed under the ordinary rules for individuals.

Inheritance and gift tax exemption for controlling shareholdings (Article 3(4-ter) TUS)

Under Article 3(4-ter) of the Consolidated Act on inheritance and gift tax (TUS, Legislative Decree 346/1990), transfers of businesses, quotas and shares to descendants and the spouse, including through a family pact, are not subject to inheritance and gift tax. The current wording was introduced by Legislative Decree 139 of 18 September 2024, for successions and gifts from 1 January 2025. For companies with share capital:

• the exemption covers shareholdings through which the beneficiary acquires or adds to legal control;
• the beneficiary must keep control for at least five years and declare this in the succession return or in the deed;
• for partnerships, it is enough to keep ownership of the interest for five years;
• the exemption also covers companies resident in the European Union, the European Economic Area or countries with adequate exchange of information.

If the conditions are not met, the exemption is lost: ordinary tax, penalties and late-payment interest become due. With a holding, the control to be transferred is control of the holding itself: if a 60% stake is split equally among three children, none obtains control and the exemption does not apply. It does apply if the controlling stake is given to the children in co-ownership, with a common representative (Article 2347 of the Civil Code), as clarified by Revenue Agency Circular 3/E of 22 January 2008. Ending the co-ownership within five years loses the benefit (ruling 38/2020), and shares received in co-ownership cannot be added to shares already held individually by each child (ruling 109/2026).

Gifting holding shares: usufruct, bare ownership and by-law clauses

A common model is a gift of the bare ownership of the shares, with the founder keeping the usufruct. Voting rights belong to the usufructuary unless otherwise agreed (Article 2352 of the Civil Code): if the founder keeps the vote, the children do not acquire control and the exemption does not apply. According to ruling no. 38 of 7 February 2020, the exemption applies if the vote is given to the bare owners by an agreement made together with the gift.

Where the exemption does not apply, unlisted shares are valued in proportion to the company's net equity (Article 16 TUS). Ruling no. 42 of 18 February 2026 considered the gift tax saving resulting from the holding's lower net equity, compared with the contributed company, an undue advantage, but ruled out abuse because the transaction had economic substance (unified management, deadlock clauses, gradual transfer).

By contrast, ruling no. 115 of 4 June 2026 treated as abusive, for gift tax purposes, the creation of a new holding above an existing family holding through a controlled-realisation contribution (Article 177(2)) followed by a gift of its shares to the children: the lower taxable value was an undue advantage, as the new holding was placed on top of an existing family holding without significant non-tax reasons and the stated goals could be achieved by a direct gift. The outcome therefore depends on the actual, documented organisational reasons.

The by-laws complete the structure: pre-emption and approval clauses, special rights for Srl quota holders (Article 2468(3) of the Civil Code) or share classes, deadlock and appointment rules. However, clauses reserving veto rights to the founder may prevent the children from having effective control and cause the exemption to be lost, as in the same ruling no. 115/2026. Ruling no. 116 of 4 June 2026, which does not concern abuse, denied the exemption for a gift, through a family pact, of the bare ownership of partnership interests with a life interest reserved to the donor, because representation and management remained with the donor; according to the Agency, the exemption can still apply to bare ownership alone if the bare owner obtains full management powers.

Family pact (Articles 768-bis et seq. of the Civil Code)

With a family pact, an entrepreneur transfers the business, or a shareholder transfers shareholdings, to one or more descendants. The contract:

• requires a notarial deed and the participation of the spouse and all forced heirs;
• obliges the recipients to pay out the other participants, unless they waive it;
• makes what is received immune from collation and clawback claims.

The transfer of shareholdings falls within the Article 3(4-ter) exemption on the same conditions. Ruling no. 450 of 30 October 2019 ruled out abuse for a contribution to a holding followed by a family pact giving control to the children in co-ownership. The sums the recipient pays to the other forced heirs are not covered by the exemption. For gift tax purposes, however, they are treated as gifts from the founder, so the rate and allowance depend on the relationship between founder and heir, for example parent and child rather than siblings (Supreme Court judgment 29506/2020, confirmed by judgments 19561/2022 and 19627/2024; Revenue Agency Resolution 12/E of 14 February 2025).

Trusts and other solutions

A holding can be combined with, or replaced by, a trust. Since 2025 inheritance and gift tax is generally charged when assets pass to the beneficiaries, with allowances and rates based on their relationship with the settlor; the settlor may opt to pay when assets are settled, an option that, under Article 13 of Legislative Decree 148/2026 in force since 12 August 2026, also covers mortgage and cadastral taxes (Article 4-bis of Legislative Decree 346/1990). Trusts are covered in a separate guide.

Practical points before setting up the holding

It is worth:

• checking the tax cost of the shareholdings and the requirements of the chosen regime;
• choosing between an Srl, an Spa or a partnership limited by shares according to governance needs;
• coordinating contribution, by-laws, gifts and will;
• deciding who will exercise the vote and how control will be kept for five years;
• documenting the organisational reasons for the transaction.

From 1 January 2027: new article numbers

The new consolidated codes apply from 2027. In the Consolidated Income Tax Act (Legislative Decree 117 of 19 June 2026):

• Article 177 keeps its number, but paragraphs 2-bis, 2-ter and 2-quater become 3, 4 and 5;
• Article 87 becomes Article 96 and Article 89 becomes Article 98;
• Article 162-bis becomes Article 161;
• Article 30 of Law 724/1994 becomes Article 301.

In the Consolidated Act on registration tax and other indirect taxes (Legislative Decree 123 of 1 August 2025), Article 3(4-ter) TUS becomes Article 89(6) and Article 16 TUS becomes Article 101.

What to do in practice: setting up the family holding company and transferring shares

1. Preliminary review: tax base of the shares and the contribution regime (control, Article 177(2), or the paragraph 2-bis conditions).
2. By-laws: rules on voting, appointments and deadlock, without founder vetoes that deprive the children of control.
3. Gift or family pact: for bare ownership, an agreement made with the gift giving the children the vote; in the deed, the statement on keeping control for five years; for a family pact, a notarial deed.
4. Reasons for the transaction: document them in writing; for complex transactions an anti-abuse ruling can be requested.
5. In the following five years: keep control and run the non-operating company test every year.

Key risks of a family holding company

• Control not transferred (shares split equally, voting rights left with the usufructuary, founder vetoes): the exemption does not apply and ordinary tax is due (Article 3(4-ter) TUS; rulings no. 38/2020 and no. 115/2026).
• Loss of control within five years, including when co-ownership is dissolved: ordinary tax, a penalty and late-payment interest.
• Abuse of law. Under Article 10-bis of Law 212/2000 (Taxpayers' Charter), a transaction without economic substance that essentially achieves undue tax advantages is abusive; it is not abusive if justified by non-marginal non-tax reasons, including organisational or managerial ones, such as reorganising the group ahead of succession. A new holding without significant non-tax reasons may make the gift tax saving undue (ruling no. 115/2026).
• Holdings of personal-use assets. A holding that mainly owns real estate or assets used by family members faces different risks: assets made available to shareholders may generate taxable income for them, and stakes in real estate companies generally do not qualify for the participation exemption. For these holdings, and for those that do not control the operating company, the Article 3(4-ter) exemption is uncertain: under the pre-2025 wording, the Revenue Agency and the Supreme Court denied it where no business was carried on (ruling 552/2021; order 6082/2023). The current wording only requires control for companies with share capital, but the Revenue Agency has not yet taken an explicit position.
• Non-operating companies. Holdings are subject to the non-operating company test (Article 30 of Law 724/1994): if income is below the statutory minimum, a deemed minimum income and other penalties apply. Since tax year 2024 (Article 20 of Legislative Decree 192/2024) the minimum income is 1% of shareholdings, securities and receivables (previously 2%), 3% of real estate (previously 6%), with lower rates for A/10 offices, recently acquired or revalued residential property and municipalities with fewer than 1,000 residents, 6% of the assets in Article 8-bis of Presidential Decree 633/1972 and 15% of other fixed assets; for the deemed minimum taxable income the rates are 0.75%, 2.38%, 4.75% and 12%.

Legal sources

• Article 177 TUIR, text in force – Normattiva
• Article 87 TUIR – Normattiva
• Article 89 TUIR – Normattiva
• Article 162-bis TUIR – Normattiva
• Article 3, Legislative Decree 346 of 31 October 1990 – Normattiva
• Articles 768-bis et seq. of the Civil Code – Normattiva
• Article 10-bis, Law 212 of 27 July 2000 – Normattiva
• Article 30, Law 724 of 23 December 1994 – Normattiva
• Legislative Decree 192 of 13 December 2024 – Normattiva
• Article 4-bis, Legislative Decree 346 of 31 October 1990 – Normattiva
• Article 5, Legislative Decree 192 of 18 December 2025 – Normattiva
• Legislative Decree 139 of 18 September 2024 – Normattiva
• Article 11, Decree-Law 38 of 27 March 2026 – Gazzetta Ufficiale
• Article 9, Legislative Decree 148 of 7 August 2026 – Normattiva
• Revenue Agency Circular 3/E of 22 January 2008 – Agenzia delle Entrate
• Ruling no. 450/2019
• Ruling no. 38/2020
• Ruling no. 42/2026
• Ruling no. 115/2026 (Italian)
• Ruling no. 116/2026 (Italian)
• Ruling no. 109/2026 (Italian)
• Ruling no. 552/2021 (Italian)
• Revenue Agency Resolution 12/E of 14 February 2025 (Italian)
• Legislative Decree 117 of 19 June 2026 – Normattiva
• Legislative Decree 123 of 1 August 2025 – Normattiva