You may not be aware, but from an inheritance tax point of view, Italy is actually considered more like a fiscal paradise. After you have picked yourself up off the floor because I just called Italy a “fiscal paradise”, you might want to read on. If your estate, or part of it, is likely to be subject to Italian inheritance tax on your death, then the current rules may interest you.

Italian inheritance tax law dates back to the Napoleonic period.

It requires parents, on death, to leave a major proportion of their wealth to their children instead of just their spouse. This system of forced heirship still exists today and continues to shape how estates are distributed in Italy.

Italy’s inheritance tax works as follows:

If the estate is passed to your spouse or relatives in a direct line, such as children, they are required to pay 4% on the value of the inheritance that exceeds one million euro per beneficiary. Brothers and sisters must pay 6% with an allowance of one hundred thousand euro each. Other relatives must pay 6% or 8% depending on the degree of relationship, but without any allowance. Non‑relatives pay 8% with no allowance.

However, there is a term called ‘eredi legittimi’  meaning that only certain relatives have an absolute right to the share of your estate on your death.  These are your children and, spouse.   If you don’t leave any children then your parents and brothers and sisters have a legal right to a share in your estate and only in the event that there are none of the above, would your other relatives up to the 6^th degree have a legal right to a percentage of your estate.

For foreigners (non- Italians) living in Italy at the time of death they have a right to nominate the law of their home country as a way to distribute the assets from your estate on death, instead of being forced to adopt the Italian forced succession rules.  (If you are from the UK, this could create significant IHT planning opportunities).   It mean you are taxable in your home country (depending on the IHT rules there) but simply means you may be able to distribute your assets according to a last will and testament, if that is your choice.   One exception does apply, where you have spouse of children who are resident in Italy at the time of your death, and in this https://spectrum-ifa.com/rendita-catastale-in-italy/ case, they may be legally entitled to their fair share of your estate regardless of your will.  If you are in any doubt it is always best to consult a legal professional to discuss the options.

Despite Italy having a large number of people who are subject to inheritance tax each year, the tax collection is relatively small. This is due to the high allowances and also the fact that succession for a property is based on the valore catastale, not the market value. The cadastral value is often significantly lower than the real value, which reduces the taxable amount.

There has been periodic political discussion about increasing inheritance tax in Italy, but as of 2026 no changes have been implemented. The current system remains one of the most generous in Europe, especially for spouses and children. However, this does not mean that planning is unnecessary. On the contrary, understanding how your assets are treated under Italian succession law can make a significant difference to what your heirs ultimately receive.  The new UK Statutory Resident rules https://spectrum-ifa.com/new-uk-inheritance-tax-rules/ for inheritance tax mean that many more UK nationals living in Italy may be able to avoid UK and Italian IHT altogether with some clever planning.

As part of any inheritance tax or succession planning that you may undertake, you may want to look at ways in which you can hold assets in a more tax‑efficient manner. The polizza assicurativa — or life assurance bond — meets exactly that criteria. Any money that you hold in one of these tax‑efficient accounts is completely free from Italian inheritance tax and is kept outside of the estate when the value is calculated. This can be particularly useful for those who wish to leave assets to beneficiaries who are not in the direct line, or who wish to avoid the constraints of forced heirship within the limits permitted by law.   It is also outside the Italian equivalent of probate (successione) and so will not get potentially tied up for any length of time in administration or legal affairs, potentially saving thousands in legal fees as well.

The not‑so‑good news is that if the majority of your estate is in your property, this cannot be placed inside the tax‑protective structure. However, any other invested or investable assets can be, generally from around €250,000 upwards. One of the great advantages is that there is no upper limit to contributions. You can protect a large part of your estate from Italian inheritance tax easily and with maximum flexibility to access the capital and any income from it during your lifetime.

If you are buying a house in Italy and are intending on benefitting from the system of detractions and deductions for the costs of building and renovating your property, then here are 5 things which we learned in our home restoration.

1. All payments must be made by traceable means i.e bonifico (bank transfer) or credit card payment. No trace, no bonus!
2. If paying by bonifico (bank transfer) then you need to pay by using the ‘bonifico per agevolazione fiscale’ option with your bank and NOT the ‘bonifico ordinario’ option. It asks for more information, such as the partitia IVA of the company / person you have worked with and this is needed for the bonus.
3. If you employ single workmen working alone then you don’t need an authorisation (SCIA or CIA) from the local authority but if they are a ‘dita edilizia’ (this can include even 2 people working together as a construction company) then you may need to have a ‘piano di sicurezza’ from an architect who will need to draw that up and provide you with the necessary numbers/reference codes. No ‘piano di sicurezza’ no bonus! (Our’s cost around €1000!)
4. Your workmen can apply for 10% IVA (VAT) on purchased items, but this is not necessarily a given. Our commercialista recommended that we signed a document ‘richiesta di applicazione dell’IVA ad aliquota ridotta’ for each workman / company so they would be authorised to apply for it as the materials would fall under the approved renovation works. Obviously, the Agenzia delle Entrate have the right to investigate these events in the future and so we did the maximum possible to avoid future problems. Documents should be kept for 10 years.
5. Try and employ local workmen or businesses which operate in the area, because if you have problems in the future you want to be able to get hold of them quickly and easily.

Many of you will recall that in 2019 Italy introduced a preferential tax regime for pensioners taking up residency in certain areas of Southern Italy.

Over the years there have been a few tweaks made to the rules, but these have generally had the effect of making it more accessible (unlike what has happened to some other tax regimes available for new residents).

Recently, a further change has been made to the regime by raising the population ceiling for eligible municipalities from 20,000 to 30,000 inhabitants, thereby opening up a broader range of towns across the eligible regions of Southern Italy.

What the regime offers

Qualifying individuals pay a flat 7% substitute tax on all foreign-source income, in place of ordinary progressive IRPEF rates. They are also exempt from the IVIE and IVAFE wealth taxes on foreign assets and are relieved of the foreign asset monitoring obligations that would otherwise apply in the RW schedule of their Italian tax return.

Geographically, the transfer must be to a municipality in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia, or to certain municipalities affected by the 2009 or 2016 earthquakes. The population of the chosen municipality — assessed using ISTAT figures as at 1 January of the year before the option first applies — must not exceed the new 30,000 threshold.

Sound like it might be of interest to you? Feel free to get in touch for an initial consultation.

Living in a foreign country is never easy, but have you thought how complicated it would be for your family if you die suddenly?

(Apologies for the subject matter around Easter, but if you are anything like me, I like to try and organise my annual tax paperwork for the commercialista around this time and so it is also a good moment to think about putting parts of your financial paperwork in order)

This article is one which I prepared years ago and have been sending out infrequently because on my travels and in the conversations I have, it is ever apparent that most people do not have all their financial paperwork in order in case anything happens to them.

Ensuring that your papers are in order in the event of your sudden death is incredibly important when living in another country. It will provide you with peace of mind that your loved ones will not have too much difficulty in administering your estate, and your family will be thankful that you did it for them.

The big problem is that we often have documents spread across multiple locations: the office, a house in another country, with family members and in that old box that no-one dares look in.

The purpose of this article is to outline a proven way of organizing your affairs to reduce stress on the family in the event of your death.

So what is ‘THE’ folder?

It is a single file (digital or physical) where you keep all of your important personal and financial information together. It allows easy access to these documents in the event that you are no longer around to deal with these things. It is really important to have it in place where one family member takes the lead on the family finances (as I do in our household). That includes paying bills, managing accounts and storing documents.

Is it worth the effort?

Well, I think it is worth the effort. I did mine a while ago and it gives me peace of mind more than anything else. I also told a few people about its location and left a note of who my wife should contact in the event of my death.. A time of loss can be stressful enough without having to try and piece the financial affairs together.

Preparing ‘THE’ folder is much more than avoiding stress as well. If you leave behind an administrative nightmare you could also delay access to the inheritors’ funds and potentially cost a small fortune in legal fees.

Which is best…..physical or digital?

This comes down to personal preference. It can be done by either creating an electronic file that survivors can access in the event of death. This file can then be stored on your main computer, in the cloud or on an external hard drive. Alternatively you can use a physical folder to keep all of the important information together.

For what it’s worth, I decided to do both when building mine because my wife prefers paper and so is happier with hard copies of everything. I prefer digital. I have also shared the digital folder with some trusted family members.

So what should go in ‘THE’ folder?

Birth, marriage and divorce

• Personal birth certificate
• Marriage licence
• Divorce papers
• Birth certificate/adoption papers for minor children
• Certificato di residenza (although it only has a 6 month validity, it might be worth while keeping a copy in there, where you are listed as being at your current address)
• Stato di Famiglia document

You can download free copies of your Italian documents, and copies with the ‘bollo’ (for €16) from the Italian national register website, here: https://www.anagrafenazionale.interno.it/ You will need to access it with your SPID or CIE.

Life insurance and retirement

• Life insurance policy documents (including beneficiary nomination forms)
• Details of any employer death in service benefits
• Personal pension documents
• Employer pension details
• Annuity documents
• Details of any entitlement to state pensions and in which country they derive.

Bank accounts

• List of bank accounts with account numbers, login details, passwords etc
• Details of any credit cards
• Details of safety deposit boxes

Assets

• Property, land and cemetery deeds
• Timeshare ownership
• Proof of loans made
• Vehicle ownership documents or rental agreements.
• Stock certificates, brokerage accounts, investment platform details, online investment account details
• Details of holdings of premium bonds, government bonds, investment bonds
• Partnership and corporate operating/ownership agreements (including offshore companies)

Liabilities

• Mortgage details
• Proof of debts owed

Details of gifts

• Dates and amounts/values (potentially helpful when calculating any inheritance tax liability)

Income sources

• Make a listing of all your sources of income, especially ones that your family might not know too much about
• Employer details
• A copy of your most recent tax return or accounts.

Monthly expenses

(so they can be maintained if necessary or cancelled if not.  Essentially list the fixed costs which would need to continue after death)

• Utilities
• Insurance
• Rent/mortgage
• Loans
• Subscriptions/memberships

Email and social media account details 

Essentials

• Will / testament + details of the legal firm that helped create it
• Living will details.

• Instruction letter/s
• Trust documents
• Burial/cremation wishes

Contact details

• List of names and contact numbers for: Financial adviser, doctor, lawyer/solicitor, accountant, insurance broker, 

How often should ‘THE’ folder be reviewed?

Firstly, it is sensible to note the date that it was last reviewed so that anyone using it has an idea of how up-to-date the details are.

Going forward, reviewing the file on an annual basis should be sufficient.

This may, however, be a step too far for you given the data breaches that seem to happen often and I appreciate that and if you are not comfortable in using such an app then its important to have a physical record some where that can be accessed in the event of your death.

PHONE PASSWORDS 

This may seem like common sense but our lives now revolve around our phones and so ensuring that you leave details of not just your password to access the phone / PIN or line drawing shape, but also the PIN or access codes when the phone has been switched off AND your PUK code in the event that they get blocked out.    If you use fingerprint authentication then you may also want to ensure that you leave open another access possibility, such as the PIN so that the phone can be opened without the need for your fingerprint, when that is no longer possible.

COMPUTER PASSWORDS 

As per the above, do the same for your computer.

SPID and CIE 

It’s probably worth a note about your SPID (Sistema Pubblico di identità digitale) and / or your CIE ( carta d’identità abilitata).  These are digital identities accessed via apps and are now arguably some of the most important  phone apps to access important financial and legal information held by the Italian state and therefore ensuring that you leave details of your passwords to access the apps could help your beneficiaries resolve estate issues without needing to engage or financial professionals to communicate with the various agencies on your behalf and at great cost.

And finally…

Lastly, be sure to tell someone about it. There is little point going to the effort of creating such a folder if no one knows of its existence  / where to find it.

Missing billions, shady finance, body-snatchers and a murder investigation.

Is it a new Netflix series?

No, it’s banking, Italian style…

Recently we have had confirmation that the proposed acquisition of Mediobanca by Banca Monte dei Paschi di Siena (MPS) will be completed. This amounts to the apparently inexplicable phenomenon of one of Italy’s best banks being taken over by what is, arguably, the country’s worst. Read on for proof that truth is certainly stranger than fiction in the world of Italian banking.

Banca Antonveneta, at the time a moderately important domestic bank, had only been acquired by ABN Amro in 2005 as a result of the bankopoli scandal.

This is a whole other story involving market manipulation, a corrupt Governor of the Bank of Italy (the only one ever to have been forced to resign) and an investor group that nicknamed itself I furbetti del quartierino (the local hustlers) – but I digress. Antonveneta ended up in the hands of Spanish group Santander as part of the ABN Amro takeover and the asset was assigned a value of €6.6 billion, yet it was sold a few days later to MPS for €9 billion. The ridiculousness of this situation was summed up by one of the analysts present when the deal was announced. He posed this simple question to MPS management: “Did you even negotiate the price for five minutes?”

Whilst officially ruled to have been a suicide, there was plenty of speculation that other, darker forces were involved. Of course, as is so often the case in financial frauds, lengthy court proceedings resulted in acquittals on criminal charges for all concerned.

Now, if the sordid story finished here with the collapse of MPS, the next chapter could not have been written, but of course politicians never want to let a good crisis go to waste and banks are always fun political toys.

Amongst the state’s interventions to prop up MPS, we can highlight the issuance of guaranteed bonds (Tremonti Bonds, named after the finance minister of the Berlusconi era, and then Monti Bonds, named after technocrat PM Mario Monti), subsequently repaid during rounds of capital increases that left the state on the hook for about €7 billion by the end of 2022. Subsequent equity sales brought in about €2.7 billion and left a remaining stake of about 12% in MPS. Following the takeover of Mediobanca, the state’s shareholding in the combined group has now been diluted to under 5%, currently worth somewhere over €1 billion. Not a great return on its investment so far.

To give you a taste of the kind of deal Cuccia was famous for: when FIAT was in grave financial difficulties in the ‘70s, Cuccia arranged for Gaddafi’s Libya to buy a 10% shareholding – it wasn’t a good look for FIAT’s Gianni Agnelli, who was rather happier in the company of friends like Henry Kissinger, but needs must. It’s not surprising that Cuccia was generally considered to be the one pulling the strings that made the stock market move – a point that was made rather morbidly when his corpse was stolen from its grave on Lake Maggiore and held to ransom. The demand, aside from cash, was that the Milan stock exchange index had to regain the level of 50,000 points (+35%!) by the end of the year. This didn’t happen, so evidently there were at least some limits to the man’s power.

The question of course is: why has this transaction occurred?

The following is from the official MPS press release following the acquisition:
The new Group structure is aimed at achieving strategic and profitability objectives and at fully achieving industrial synergies so to maximize value creation. This configuration is designed to enhance the distinctive expertise of Mediobanca and its professional resources, within a specialized operating model.

Right. This type of communication is technically known as a supercazzola in Italian. Don’t worry about the lack of subtitles – nothing he says makes any sense, which is sort of the point…

The sad reality is that Mediobanca, aside from being one of the crown jewels of Italian finance, sits atop another crown jewel: a 13% shareholding in the insurer Generali, a stake currently worth about €7 billion. It may well be that the dismemberment of Mediobanca and Generali and the distribution of value to its shareholders will be part of the Italian government’s strategy to promote nationalist capitalism. It’s hard to resist the temptation to say that Cuccia, who studiously avoided political interference, will be rolling in his grave (yes, his body was eventually returned to its rightful resting place).

I wanted to communicate some information regarding what is going on in the Middle East with some information from Evelyn Partners ( one of our asset management partners) in an email newsletter to all advisers, which provides perspective regarding investments.    If you have any questions or thoughts, do not hesitate to get in touch and fingers crossed this situation does not last long! 

Crude awakening in the Middle East

Escalating tensions in the Middle East have brought renewed market volatility and lifted oil prices, but diversified portfolios offer resilience in periods of uncertainty

 
What has happened?

Over the weekend, tensions between the US, Israel and Iran escalated materially. Israeli strikes have reportedly targeted Iranian nuclear facilities, while the US has signaled a broader objective that may extend beyond deterrence towards regime change. Iran has responded with attacks affecting parts of the Gulf region, including strikes impacting areas in the UAE, Qatar, Bahrain and Kuwait, as well as Israel.

This marks a significant shift from prior contained flare-ups. Financial markets are responding to the risk of further escalation.

Initial market reaction

Three key price moves frame the immediate response:

• Brent crude oil is up roughly 10%, to around $80 per barrel.
• S&P 500 futures are modestly down approximately 1.5%.
• Gold is up around 2.5%, reflecting demand for traditional safe havens.

Paradoxically, such leverage could also deter China from blockading or invading Taiwan, a far larger systemic risk to global markets given Taiwan’s dominance in producing advanced semiconductors.

Key risks to watch

The primary “tail risk” remains disruption to the Strait of Hormuz, through which roughly a fifth of global oil supply passes. At present, while there are signs of disruption – including higher shipping insurance costs and some tanker hesitancy – the Strait remains open and traffic continues. A full closure or mining of the waterway would represent a far more severe shock to energy markets and global growth.

There is also the risk of broader attacks on regional energy infrastructure or US-linked assets across the Gulf, as most of the key oil infrastructure sits within short-range missile range of Iran. However, at this stage, markets are pricing heightened uncertainty rather than a sustained supply shock.

It is also worth noting that global oil inventories have been rising, which provides a partial buffer against near-term supply disruption. That does not eliminate risk, but it may dampen the impact unless escalation becomes materially worse.

Equities have softened modestly, but earnings growth remains the dominant driver of equity markets. Corporate Earnings Per Share momentum has so far offset geopolitical and tariff concerns this year, and we are not seeing signs of systemic stress or disorderly market functioning.

• Energy prices rise, supporting oil and gas equities.
• Gold acts as a multi-use hedge during geopolitical stress.
• Inflation-linked bonds, such as TIPS, provide protection should higher crude feed into inflation expectations.

Within equities, exposure to energy producers can help offset broader market weakness linked to rising oil prices. In fixed income, inflation-linked bonds could benefit from rising inflation expectations. Alternatives such as gold continue to demonstrate their value during energy shocks, as seen in previous episodes including 2022.

Investment strategies are designed with periods like this in mind. They are constructed to withstand geopolitical shocks, inflation pressures and bouts of market volatility, while remaining fully liquid and aligned with clients’ long-term objectives and risk profiles.

Looking ahead

We expect markets to remain volatile in the days ahead. News flow may be intense and, at times, sensational. It is important to distinguish between media tone and market fundamentals.

At this stage, this is not a systemic market event. We are not seeing disorderly trading conditions or liquidity stress.Remain vigilant and ready to adjust portfolio positioning should fundamentals materially change.

For now, the appropriate stance is calm, disciplined and long term. Periods of geopolitical tension are unsettling, but diversified portfolios are designed to navigate precisely these environments. We will continue to monitor developments closely and keep clients informed with measured, evidence-based updates as the week progresses.

I know these are not easy time and so if you have any questions, or would just like to send me some comments then feel free to do so. I am always interested to hear your thoughts on these matters.

In this Ezine I will summarise the discussions and news from our annual event which took place in Monaco this year.   

As you may know my newsletters are not AI generated and for this reason they take me a little time to summarise the information, and also find the time to do so.     I hope that you appreciate the fact that you are not being sent existing information which has been trawled out of the internet-o-sphere, but rather real, new and original content.  (AI was a big story on the conference actually, so I will be touching on this a bit further down.

Interest rate cuts – Tax cuts – Lower energy costs – Deregulation

One interesting thing that occurred before I went on the conference, in fact just a few days before, was that a handful of people contacted me to say that they wanted to sell out of US based assets because they didn’t like the activities of Donald Trump and the current US administration. My advice at this time was:

We need to separate the political from the investment!

It is always good to be reminded that the US stock market is valued (USD 67-69 trillion) at more than the rest of the worlds stockmarkets cumulatively (USD 55 to 60 trillion). So no matter what we think about the politics in the US at the moment, to exclude ourselves from the US stockmarket would be akin to investment suicide. We can make investment choices based on sustainable and ethical choices (and we offer these services as well for our clients) but some of the best research, technological innovation and new creative thinking comes from the US and so it still retains it’s spot as one of the best, if not THE best places for an investor.

To further explain the importance of the US market, it was explained at the conference, that should just 1% of the total value of the US stockmarket be moved at any one time, it would hardly move the markets in the US at all. That same amount would be the equivalent of the entire German stockmarket (which includes all the big names we know such as Volkswagen, Basf, Siemens, SAP, Mercedes Benz and many more) and would have a tremendous impact on the German stockmarket and in Europe, just to give context on how important the US is for our portfolios.

Saying all this, I appreciate that the Trump administration may still be a little too much to bare for some people, and so here is my summary of what is going on there:

DRIVING THE US DOLLAR LOWER

If the U.S. economy is about 30% of global GDP, then should its currency, being that it is the reserve one, account for 35%-40% of global reserves and not 50% or 60%?

It is now pretty evident that the Trump administration is aiming to push the US Dollar lower against other currencies…but why?

The old globalisation game where the US outsourced everything and let China build the factories is effectively over. The idea that cheap imports were free trade and you don’t pay the price for destroying your industrial base is something which needs to be re-addressed as many economists on both the left and right side of politics, agree. To some extent Beijing also started weaponizing supply chains, particularly in rare earths such as lithium, cobalt and graphite, because they have an almost 90% control over these rare earths, both in mining and refining. The Trump administration is aiming to protect US interests and rebuild American industry from the ground up.

Tariffs are back—and they’re not going anywhere. They have largely turned out to be a negotiating stick and strategically aimed at specific goods rather than blanket punishment, to protect US domestic producers and force companies to bring manufacturing back to the US. As DT has said: “if you want access to the world’s largest consumer market, build in the US” Produce there and employ Americans.

A WEAKER DOLLAR IS PART OF THE PLAN

Not a collapse, but more than likely a deliberate, controlled depreciation to make U.S. exports competitive again and make imports more expensive. (2026 may see a further USD decline when the new Fed Chairman Kevin Walsh is put in place, and then it could stabilize)

Cheap foreign goods have flooded the US market (and Europe) for decades because the dollar was probably too strong. A weaker dollar rewards domestic production, boosts manufacturing margins, and will hopefully brings jobs back to places that have been forgotten for years! (If this strategy works then you can be assured that Europe wil adopt the same approach, no matter how much they hate to admit it!)

PROJECT VAULT

This could be one of the most significant decisions made by any US administration for decades. Project Vault is a $12 billion strategic plan to stockpile critical minerals, the equivalent of a Petro Reserve for the AI and defense age. The US is building a preferential trading bloc with price floors, adjustable tariffs, and enforceable rules to crush China’s predatory pricing and market flooding.

The winners will be the ones who control the physical economy—the mines, refineries, smelters and processing plants. Critical minerals and rare earth security.

Without them, nothing modern works. Jet engines. Hypersonic missiles. Wind turbines. Electric motors. Drones. Smartphones. AI data centers. Defense systems. EVs. Nothing.

And here are some examples:

Niobium—an irreplaceable steel strengthener. Adds toughness, corrosion resistance, and high-temperature performance to superalloys
(Brazil controls ~90% of global supply. The U.S. imports 100%. Zero domestic production. One mine in Canada which given the fractious nature of current US / Canada relations, the US considers this a national security nightmare)
Neodymium (Nd) and Praseodymium (Pr)—the magnetic rare earths that power permanent magnets, the strongest magnets ever made.
(Essential for EV traction motors, wind turbine generators, missile guidance, radar, precision-guided munitions, and high-performance robotics)

CHINA CONTROLS CIRCA 90% OF REFINING AND 93% OF MAGNET PRODUCTION AND 60% OF THE REFINED SILVER MARKET.

IF RELATIONS SOUR FURTHER, THEN BEIJING WITH JUST ONE PHONE CALL, COULD PARALYZE WESTERN DEFENSE AND CLEAN ENERGY SUPPLY CHAINS

And so, in a nutshell, that is what the Trump administration would appear to be doing geopolitically. (I won’t mention any US domestic issues that are….well….. questionable).

My hunch is that you will see Europe follow suit. Europe appears to have woken up (c/o D.T) to the fact that it needs to protect itself and can no longer rely on the US Military Industrial Complex. Re-arming Europe seems to be the EU leaders first objective, but if they then see progress with this economically nationalistic kind of behaviour in the US then I would say that they will start to walk a similar path, even though the EU is quite protectionist by nature anyway. It may mean that you need to stock up on TEMU goods now, whilst the prices are still low!

I have probably dedicated more time here to the Trump administration than I had wanted to, but it is clearly on alot of minds and so was worthy of a few lines.

However, on our conference we did discuss other investment matters, which arguably are not quite as important as what is happening in the US administration, but also warrant some time being spent on them.

THE GREENLAND DEBATE

These conferences are always interesting to get perspective on certain matters and the issue of Greenland was brought to light as follows:

From 1951 to 2004 the US had the right to place US bases in Greenland without any permission required.

From 2004 this power was taken away when Greenland gained sovereignty and fell under the supervision of Denmark.

Now, the pre-1951 agreement is being re-negotiated, and although not a ‘free to do what you wish’, the US will certainly have the possibility to expand its military presence. Was the whole ‘buying Greenland fiasco’ just a ruse to restablish this agreement?

THE AI BUBBLE

At the 2025 conference alot was made of AI and how it would be changing the world, putting people out of work and taking over our world. Just one year on and the view from the asset managers was almost completely the opposite, but also that it is not going anywhere soon.

However, an AI bubble (like the tech bubble of 2000), it would not seem to be. AI is already helping businesses to improve productivity but not by firing staff. There is no evidence of this and the companies running AI models themselves, are already profitable. In addition the Big tech companies are cash rich. It is more likely that AI integration will more of a messy technological shift, than a huge damaging effect and it’s very unlikely that AI stocks will be the cause of a global recession, or mass unemployment no matter what you read online.

Net income from Tech + comms services companies has grown from 23.1% in the year 2000 to 35.3% in 2025

HOWEVER, AI IS NOT LIVING UP TO EXPECTATIONS

A term was used: ‘Crap in – Crap out’.

What is being found is that the AI we know: ChatGPT, Google Gemini etc cannot be relied upon for accurate results.

Search results are based on the data that is out in the internet-o sphere. If that data is flawed then it has no way of knowing how to fact check it and hence it will produce inaccurate results. (In fact caught out ChatGPT on 3 occasions, when I knew its results were incorrect. I now use Google Gemini, which appears to be better). There is also a HUGE amount of internet fraud and scam and the culprits are using the internet to deliberately put out content which furthers their devious means. So, how can we rely on such a system? Markets are worried about the inability to overcome this problem and about a lack of innovation in AI. If we are all fishing in the same pool of information and being provided the same results then innovation and creativity grinds to a halt, and that is not good for businesses who are looking to find an competitive edge and / or increase productivity.

THE STRENGTH OF AI

But, AI probably has a more focussed strength in it’s ability to gather, organise and analyse large data sets. Private data is the real gem! It’s what you can’t see rather than already public data. I may have mentioned in my Ezine last year the example of the Lancet medical publication in the UK, which has archives going back 203 years. It is almost unimaginable that human beings would be able to reference a tiny fraction of that information, whereas they are already using AI tools to organise data and information in their business and to make it available to a much wider and much more targeted audience. Data is the new gold! Loyalty card data would be a perfect example of data which can be privately exploited by companies looking to gain a competitive edge with the use of AI tools.

AI POWER

The strange thing with AI is that the people who are probably going to make money from it are not the people directly running AI tools, but more likely the periphery businesses that are needed to keep it running: energy providers and data centres being good examples: see images below to give you an idea of just how many resources are going to have to go into running and maintaining these centres.

Could nuclear and renewables be the winners long term?

TWO MORE ITEMS

INTEREST RATES:   don’t expect rates on your cash to be rising anytime soon.  If you are sat with the majority of your assets in cash, then you should really be thinking about the long term implications of inflation on these monies.    This is exactly the scenario that governments wanted to see.  Low interest rates (which keep government benefit payments down and debt repayments low) but an inflationary economy.  They pay their debts down quicker amd erode them away,  and we feel the pinch.  You can see the interest rate trend in the chart below.

OIL

Given the US’s influence over the world’s major oil producers (Venezuela, Saudia Arabia,  Iran and Canada) , it is likely that there will be a glut of oil in the next 5 years.  This will most likely push prices down.  This is certainly what the D.T administration wants.   Energy prices and inflation should fall which could be good for US stocks in particular.   The wider US market could benefit greatly.

I hope you have enjoyed this content!   Once again apologies for the time taken to get it you.  Unfortunately I don’t even think AI is sophisticated enough…yet…to decipher my scribbles and handwriting when note taking.

As always, if you have any questions, or would just like to send me some comments on what you have read here, then feel free to do so.   I am always interested to hear your thoughts on these matters.

Equally, if you would like to follow up individually on anything then you can do so on gareth.horsfall@spectrum-ifa.com or message / call me on +39 333 649 2356

New rules from 2024

Firstly, if you have already qualified for this regime under an earlier version, this article will not be relevant for you. There are, however, some transitory arrangements for people who became resident under the regime in the 2024 tax year but had purchased a property in Italy by the end of 2023.

If you think this might apply to you, then bring it up with your tax adviser to see which version of the regime applies to you.

What does the benefit consist of?

• A 50% reduction in taxable income for a period of 5 years, starting with the year the individual takes up residency in Italy;
• It is possible to increase this reduction to 60% if the individual has a child under the age of 18 living with them in Italy.

What are the requirements?

• The individual cannot have been a tax resident in Italy within the 3 tax years prior to taking up residency;
• This requirement increases to 6 or 7 years when there is continuity in the employment relationship (e.g. an inter-group transfer) – the 7 year rule applies when the individual was working for an Italian company in Italy before moving abroad;
• Commitment to remain a tax resident of Italy for at least 4 years;
• The work must be performed primarily in Italy;
• Qualification or specialisation requirements must be met (generally speaking you must have a university degree, be specialised by a certain amount of professional experience or be involved in certain types of research).

What are the limitations?

• Maximum income able to benefit from the incentive: €600,000p.a.
• Certain types of income may be subject to exclusion for freelancers, in particular any passive income streams like royalties. The general rule is that the individual must be engaged in “arts and professions”. Sole-trader business income would also be excluded.

To sum up the critical points:

• If you have already been a resident of Italy in the past, make sure you understand the minimum period of residency abroad that applies to you;
• Check if you satisfy the qualification or specialisation requirements;
• As a freelancer, make sure that your particular activity or parts thereof would not be excluded;
• Watch out for clarification of the pension contribution requirements.

If you think this might be of interest to you, don’t hesitate to get in touch. I can’t give you a tax opinion, but I can discuss living in Italy more generally and can help with your overall planning, including getting appropriate professional advice as necessary.

We are a team of fully regulated financial advisers working across Europe, with a strong presence in Italy since 2010. Our focus is on helping expatriates, and returning Italians from abroad, who are residents or want to become residents in Italy.

1. Needing a professional to help you – Unless your financial affairs are really simple then you will likely need a professional to help you complete your tax return. Self declaring is complicated due to the codes used to complete the forms and so might not be worth your while due to the risks of getting it wrong. That being said you can get info online as to how to complete your tax return which is helpful.
2. Reddito diverso e reddito di capitale – If you have investments in something like Exchange Traded Funds, for example, the income and capital gains are treated as one type of income (reddito di capitale) and the losses as another (reddito diverso). You can’t offset one from the other even though they derive from the same asset.
3. Wealth taxes – Many countries do not have wealth taxes. Italy introduced them in 2014 when Mario Monti was Prime Minister. At the time politically, Italy was under the spotlight for its mounting debt and so wealth taxes were introduced as a way to generate more revenue for the country. Also, it harmonised the fact that taxes were paid on domestic assets but not on assets held abroad, at the time and so capital flight was rampant to evade taxes.
4. Wealth tax on property – If you have a property outside the EU, then the wealth tax is calculated on the purchase value. This may seem strange but the market value is largely subjective depending on market supply and demand and would be difficult to determine. The purchase price is documented in the purchase contract and so is a definitive sum which reference can be made to.
5. Choosing your tax rate – You can choose to have your investment income and/or gains taxed at your lowest rate of income tax IRPEF (23%), if available, or the standard flat rate on investment income (26%). This comes in useful if your total income is low and you can use up your first band of income tax. Otherwise, it’s normally better to go with the standard flat tax rate. You can also deduct certain expenses from the IRPEF choice, which can lower the rate even more. This is not possible on the standard rate.
6. There are no personal allowances or nil rate tax bands for personal income. You start paying tax on Euro No 1. If you are in retirement and in receipt of a pension/ retirement income, you may get an age-related credit, depending on your income, otherwise you can deduct some expenses such as some building costs, vets bills, pharmacy expenses and doctors bills, which can reduce your income tax bill further.

For those of you who read my last Ezine you will be happy to know that I got my wellies for Christmas and also a more than welcome surprise of a toolbelt. I feel complete! I have been putting both to good use in the last week (seeing as though we have a good weather spell), by doing some early morning ‘potatura‘ of the olive trees.

I thought I would have a go myself this year since the chap who came last year hasn’t committed and it appears to be quite hard to find people in the area who are not already booked up. So, I thought I would give it a try after reading a few books, speaking with numerous people about it and watching far too many Youtube videos on the subject.

I am quickly realising how obsessive one can become when you are pruning olive trees, regarding correct shape, removing too much or too little and wondering whether the tree is growing too high, how to train it further down, whether to cut this branch or the other one. It’s quite therapeutic actually although it appears to be rather arbitary because we have no idea where the olives will produce, how many, and if environmental factors will affect production this year. However, as my 7.30am to 9 am morning routine (when not travelling) it is a good way to start the day.

Anyway, for my readers who have been doing this for many years, I will let you be the judges. See some fotos below. (Feel free to send comments about where I might be going wrong).

Moving on from land work I wanted to send this brief Ezine out just to reconnect in the New Year. 2025 proved to be a positive year for our investment accounts and it is anyone’s guess what is in store for 2026.

I am attending the Spectrum IFA Group annual conference from the 26th to 30th January and will be doing my usual round-up Ezine when I get back. We will be speaking with Rathbones Asset Management, Evelyn Partners, Prudential, New Horizon Asset Management, LGT Wealth Management and others as well.

But, before I return (hopefully Greenland will still be a part of Europe by then) I wanted to share some information on Italy with you, as a light hearted read.

On Facebook I follow a page called Dataroom di Milena Gabanelli.     You may know of her from the programme ‘Report’, which is where I first became familiar with her around 15 years ago.    Now she works for Corriere della Sera and has her own FB channel.   It’s very interesting as they regularly put out content about Italy and global events but backed up with solid facts.

The most recent one I saw was ‘Chi paga meno tasse’.  A look at the health system and exactly where tax revenue is coming from to support the system itself.

The following is summary of the video, which is only a few minutes long, but provides some quite interesting information, which I wanted to share with you.
(The data is taken from studies of  contributi previdenziali relative dichiarazione 2023.)

Let’s analyse things a little further

With an income of €29000 gross pa there is likely to be very little margin to pay your health care expenses.   In this category fall many ‘pensionati and dipendenti’ and so we can exclude them for the purposes of the analysis.

The rest are autonomi ( self-employed people- like myself)

• 1.8 million autonomi in Italy are on the flat tax regime and so cannot be considered.
• 2.2 million autonomi pay IRPEF (normal income tax rates) and of these 1.3 million declare income under €29000pa.   This means that they pay €2 billion in tax or ONLY 8% of the whole category for the autonomi.

To analyse further to see whether any of these people have a real need or if they are working in nero, we can look to the index ISA which looks at fiscal ability to pay.  They work on a points based system and if a contribuente has under 8 points then there is the risk of fiscal evasion.

Anyone who is declaring less than they actually bring in is also paying less contributions towards the health service and also they will receive less pension, which means that the people who are paying will have to pick up the bill.

It’s no surprise that the Italian government really doesn’t have much, if any, room for manoeuvre to change tax rates and why the health service is underfunded.

Short term rentals

If you like those facts you may also like the following ones about the explosion in short term rentals in Italy (affitti brevi), which go some way to explain why many cities and famous locations in Italy are now almost impossible to visit without a tremendous amount of people all doing the same.

• In 2011 short term rental advertisements didn’t exceed 20000 in the whole of Italy
• In 2021 this number had exploded to 620000
• In 2022 to 644000
• and 2023 to 700,000 which equates to approximately 11 billion euro invoiced a year

In the market of short-term rentals Italia is No 3 in the world behind the France and the USA!

If we analyse some of this data then we can see that 75% of these rentals are in the hands of private landlords and 25% managed by agencies.

Agencies, in general, retain 35% of the income to manage the cleaning and change of sheets etc. Almost all of the advertisements are now on the digital platforms like AirBnb and Booking.com, who in general keep between 14 and 18% of the income. The same platforms have been obliged since 2017 to apply a withholding tax of 21% on gross income.

In the Legge di Bilancio 2026 this withholding tax of 21% now applies to the first property. For the second a witholding tax of 26% and for owners of 3 properties or more, they are now deemed to be a business activity and must open a partita IVA (VAT position). The war on private landlords continues, not just here in Italy but across many countries, but whether it will make much difference in the long run is anyone’s guess.

Indennità parlamentare, which is a compensation payment for being a politician and spending time away from home. It is currently €10435pm Gross or €5000-5300 pm after taxes and contributi.
Diara (per deputati e senatori) – just €3500pm
+ Expenses reimbursement.

These do not always have to be documented!!!!

They also qualify for reimbursement of travel expenses
And reimbursement of telephone expenses

Pensions
The same politicians are entitled to a pension after only 5 years of working in Parliament. (versus 20 years for the rest of us!)

Interest payments
They are also entitled to an interest rate of 5.4% on the money in their savings and current accounts. The bank pays this automatically versus the average rate for us , at about
0.2 %

And on that note I will leave it there. This Ezine was really was meant to be a light-hearted way of staying in touch.

I will be following this up from our conference with a market review from the week after next, followed by some other Ezines on tax and also organising your affairs for your loved ones.