Family transfers and donations: when it becomes a risk

In the family context, transferring money via bank transfer is very common. A parent can help a child with an unexpected expense, a grandparent can contribute to a grandchild's upbringing or education, or a sibling can support a family member experiencing financial hardship.

These movements, often perceived as spontaneous gestures of solidarity, can actually have a more significant legal, inheritance, and tax impact than one might imagine. Any transfer of money, if not formalized or clearly documented, can impact future inheritance shares, create disparities between siblings, be considered a donation relevant to the legitimate portion, and, in the most sensitive cases, be contested by the heirs upon the opening of the estate.

One aspect that many overlook is that upon a person's death, heirs have the opportunity to analyze bank transactions from previous years and verify any outgoing transactions that aren't immediately accounted for. If a bank transfer lacks a clear reason, or if there's no contract or document explaining its nature, the transaction can presumably be classified as a donation and therefore subject to collation, with potential consequences for the distribution of the estate.

Bank transfers between family members, especially when they occur in the context of inheritance, therefore become a sensitive topic. On the one hand, it is a tool for everyday assistance; on the other, it can represent a transfer of assets with very specific legal consequences. From a civil law perspective, in fact, the transfer of money from one person to another without consideration is effectively a donation. From a tax perspective, depending on the value transferred, it can be significant and subject to tax.

When is a bank transfer considered a small donation?

A modest gift is one that does not significantly impact the donor's assets, assessed in relation to their income, assets, and personal circumstances. There is no fixed legal threshold, but generally, an amount roughly under €5,000 is considered modest. This assessment, however, must always be commensurate with the donor's specific financial situation. What is modest for someone with a high level of financial resources may not be so for someone with a modest income.

When the donation is of modest value, it is not necessary to use a notary and no formal formality is required. A standard bank transfer or direct delivery of the money is sufficient. However, to avoid misunderstandings with heirs or tax disputes, it is essential to indicate a precise and consistent reason for the donation. Recommended wording includes, for example:

• “Donation of modest value pursuant to art. 783 of the Civil Code in favor of [recipient name]”
• Or a specific reason that clarifies the nature of the attribution, such as "birthday present" or "contribution to university expenses".

This precaution helps prevent someone from misinterpreting that money as a debt payment or a more significant, contestable donation in the future.

There are no taxes to pay for donations of modest value. They do not need to be declared by either the donor or the beneficiary and, more importantly, they are not considered an advance on an inheritance. The Revenue Agency generally does not intervene on these amounts, unless the amount is disproportionate to the donor's means or inconsistent with their declared income, in which case it may request clarification or additional documentation.

Donating a significant amount: how do you make one correctly?

When the transferred sum cannot be considered modest, the donation takes on much greater legal significance. In these cases, the law requires the donation to be formalized with a public deed drawn up by a notary, in the presence of two witnesses, and with the explicit acceptance of the donee. If this formal formality is lacking, the donation is void.

This point is particularly important: even if the transfer has been made and the beneficiary has received the money, the gift can be challenged by the heirs precisely because it lacks legal form. This means that an heir could challenge the transfer by claiming that it violates the legitimate right or is legally invalid.

The bank transfer used to transfer the amount can be:

Ordinary bank transfer, i.e. a normal bank transfer without any particular specifications, useful if the donation has already been formalized by a notary.

A speaking bank transfer, which requires a detailed reason for payment and is used when it's necessary to precisely identify all parties involved and the nature of the transaction, especially when there are tax implications or benefits. In this case, the reason for payment could include a reference to the notarial deed or the details of the formal donation.

The bank transfer, therefore, is simply the means by which the money is transferred. The validity of the donation depends on the notarial deed that precedes or accompanies it.

What costs should be considered?

The costs of a small donation are, in effect, zero: neither the bank transfer nor the donation itself entails additional fees or taxes.

The case of donations of a non-modest value is different , for which it is necessary to support:

Notary fees vary depending on the amount of the gift, the complexity of the deed, and the notary's office. The deed must be drawn up and retained in accordance with the rules of the civil code, with witnesses present. If necessary, you can request assistance from the Agenzia delle Successioni to avoid errors.

Any taxes , which depend on the relationship between the donor and the donee. In Italy, direct line donations enjoy very broad tax exemptions.

How is a bank transfer donation taxed?

Donations of sums of money between family members, when they exceed a modest value, may be subject to gift tax. However, Italian law provides very high tax exemptions which, in most cases, make the transaction tax-free.

Here are the main thresholds:

• A tax-free allowance of €1,000,000 for gifts between parents and children, with a 4% tax on the excess.
• €1,000,000 for donations between spouses and civil partners.
• 100,000 euro tax-free allowance between siblings, with a 6% tax rate on the excess.
• Other relatives up to the 4th degree , without exemption and with a 6% tax.
• Non-relatives, 8% tax without exemption.

In most gifts between parents and children or between grandparents and grandchildren, the tax is never applied because the transferred amounts do not reach the taxable thresholds.

It's important to remember that if the donation isn't formalized with a notarial deed (when required), it's not only void from a civil law perspective, but also fiscally irregular. It can't be registered and isn't enforceable against heirs or third parties.