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Viewing posts categorised under: Moving to Italy

Moving to Italy and the average cost of living

By Gareth Horsfall - Topics: Italy, Moving to Italy
This article is published on: 12th July 2021

12.07.21

You have made your tax calculations for life in Italy, but have you included everything?

In this video Gareth talks about the costs of living in Italy and how it varies depending on where in Italy you want to live.

He also explains that whilst it is almost impossible to calculate until you are living here, it has the same effect as a tax reduction and should be taken into account when making your decision about life in Il bel paese.

If you are interested in moving to Italy or perhaps already live here,
but need to discuss some financial areas of concern,
please use the form below to contact me.

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    Are you moving to Italy?

    By Andrew Lawford - Topics: Italy, Moving to Italy
    This article is published on: 16th June 2021

    16.06.21

    I hope you are enjoying the summer weather and the return to comparative normality – long may it last!

    I wanted to let you know about a new podcast episode that has just been released. It is entitled “Brexit (and more…)”, so will be of particular interest to UK nationals residing or considering taking residency in Italy, but it also explores quite a few topics that will be more generally applicable.

    As it’s quite a long episode, I thought it would be helpful to give you an index of topics covered and the approximate minute markers so that you can easily locate the sections that are of interest to you.

    • 1:28 – Working with a UK financial adviser as an Italian resident
    • 8:55 – Equivalency in financial services between UK and EU
    • 12:57 – Taxation of EU-domiciled managed funds vs UK-domiciled managed funds post-Brexit for Italian residents
    • 15:50 – Tax declarations in Italy for directly-held foreign financial investments
    • 18:15 – The €51,645.69 question – holding foreign currencies as an Italian resident
    • 21:38 – ISAs – what they mean in Italy
    • 23:42 – Quadro RW – why you need to declare the mere existence of your foreign assets (as well the income that derives from them). Common Reporting Standards and why you should assume that information is being exchanged automatically with the Italian tax authorities
    • 25:20 – The taxation of UK real estate as an Italian resident (rental income and wealth tax (from 28:20))
    • 33:00 – Thinking about real estate investments once you move to Italy
    • 35:15 – Capital gains tax on foreign property (with particular comment on the situation for UK property owners who are non-resident in the UK)
    • 38:15 – Tax-efficient investment wrappers – what they can do and how they need to be set up. Some comment on inheritance taxes in Italy
    • 43:44 – The 7% pensioners’ tax regime
    • 50:10 – Italy vs Italia – and why you should persevere if you want to move here
    Italian financial adviser

    Click on the above links to listen

    Tax break for pensioners moving to Italy

    By Andrew Lawford - Topics: Italy, Moving to Italy, Pensions, UK Pensions
    This article is published on: 14th August 2020

    14.08.20

    Anyone like the sound of living in Italy and paying only 7% tax?

    Generally speaking, if you are contemplating the move to Italy you will be thinking about many things, but saving on your tax probably isn’t one of them. So let me give you a nice surprise: if you are in the happy situation of being a pensioner considering moving to Italy, 7% tax on your income is possible, subject to a few rules, for the first 10 years of your residency in the bel paese.

    This all came about in 2019’s budget and had the aim of encouraging people to move to underpopulated areas of Italy. Initially, the rules were that you had to take up residency in a town with fewer than 20,000 inhabitants in one of the following regions: Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia or Sicily. Subsequently, the criteria were extended to include towns in the regions of Lazio, Le Marche and Umbria that had suffered earthquake damage and which have fewer than 3,000 inhabitants.

    Of course, being Italy, something had to be difficult in all of this, and indeed the law makes reference not to a list of towns but instead tells you to look at ISTAT data (ISTAT is the Italian statistical institute) for the population levels on 1st January in the year prior to when you first exercise the option.

    Spectrum IFA Survey

    Given the difficulty in finding out exactly which towns would be covered by this rule, I delved into the ISTAT data and also dug out the relevant references to earthquake-struck towns with fewer than 3,000 inhabitants in the other regions mentioned above. I have put all of this in an Excel file which gives a list of towns eligible for the

    pensioners’ tax break in Italy divided by region and then further by province, so that you have a rough geographical guide as to the areas you could consider moving to Italy.

    As I was sifting through the ISTAT data it suddenly dawned on me that if the cut-off is 20,000 inhabitants, then almost the whole of Southern Italy is eligible for this 7% regime, and you can include in that some truly delightful places such as Vieste in the Gargano (Puglia), or even the island of Pantelleria. This is possible because Italy is divided up into municipal areas that sometimes have more feline than human inhabitants. Obviously, if you are looking for raucous nightlife then you are likely to be disappointed by what is on offer, but if, on the other hand, you like the idea of not having too many people around, then you could do worse than the town of Castelverrino in Molise (population 102) or Carapelle Calvisio in Abruzzo (population 85). Perhaps one day you could even become mayor.

    Flat Tax Regime

    This new flat-tax regime comes amid a move by a number of European countries to attract pensioners to their shores. Portugal offered a period of exemption on income tax for foreigners (the benefits of which they are now reducing) and Greece has recently announced the intention to offer a 7% flat tax on foreign-source income for pensioners (I wonder where they got that idea from?), which is also promised for 10 years. There is some discussion about the fact that the EU is not generally well-disposed towards these preferential tax regimes, which could lead to them being phased out in a relatively short period of time – so for those looking to make the most of them, time could truly be of the essence.

    tax in italy

    The great thing is that the 7% rule applies not only to your pension income, but can be applied across the board to any foreign-source income and there is also a substantial reduction in the complexity of the tax declarations that must be made. There are further tax-planning opportunities in all of this, because much will depend on whether you are planning on being a short-term or long-term resident of Italy.

    As always, the devil is in the detail as far as tax and residency planning is concerned, and the year of transition when you first establish residency in Italy is key to setting yourself up in the most efficient manner.

    So if the above sounds interesting, please get in touch and I would be happy to send you the list of eligible towns and discuss how the rules of the regime apply to your situation.