Pre-Immigration Tax Planning for Italy: What HNWIs Should Do 12–18 Months Before Moving

For many high-net-worth individuals, moving to Italy is not just a lifestyle choice; it is a strategic decision that affects wealth, family governance, business structures and long-term succession planning.

The biggest mistake people make is to fall in love with the idea of Italy, start looking at villas and international schools, and only later involve their tax and legal advisors. By then, some of the most powerful planning opportunities have already been lost.

The reality is simple: if you are considering Italy, the real planning window opens 12–18 months before you become tax resident. This is when you can still restructure assets, clean up portfolios, rethink holding companies, adjust trusts and define a family strategy that works within the Italian framework.

This article is designed precisely for that period. It is not about generic “checklists” for tourists; it is about what sophisticated families and their advisors should consider well before the first registration at the Comune.

Clarifying your goals before you choose the regime

Before diving into structures and tax rules, you need to be clear about why you are moving and what you want Italy to be in your overall plan.

Are you looking for a main family base in Europe with a long-term horizon? A tax-efficient hub while maintaining strong ties to London, Zurich, Dubai or New York? A place to retire and gradually pass the baton to the next generation? Or a base for business expansion into Europe?

These answers will influence:

• Whether you aim for Italy’s special regimes (such as flat-tax style regimes or other incentives) or remain under the ordinary system.

• How much time you actually intend to spend in Italy versus other jurisdictions.

• Which assets you want inside the Italian tax net and which you prefer to keep abroad.

Many families start from the wrong end: they ask, “Which regime is the best?” rather than “What do we want our life and wealth structure to look like in ten years?” Pre-immigration planning is the moment to align lifestyle, family and wealth objectives before fine-tuning the technical choices.

Mapping your global assets and tax footprint

The second crucial step is to map, in detail, your existing situation. For HNWIs, this is rarely simple:

• Multiple residences and “centres of life” in different countries

• Investment portfolios in various currencies and booking centres

• Companies, partnerships and fund vehicles

• Trusts, foundations and life insurance policies

• Real estate in several jurisdictions

• Pension rights and deferred compensation plans

Well before you move, you and your advisors should build a clear picture of:

• Where you are currently tax resident and on what basis

• Where your main income streams arise (salary, carried interest, dividends, rental income, capital gains, management fees, royalties)

• Which structures already exist (trusts, holding companies, family offices, private investment vehicles)

This is not a purely academic exercise. Italy will look at you through its own lens: global tax residence, “centre of vital interests”, beneficial ownership of assets and entitlement to income. The better your starting map, the easier it will be to design a structure that works with — and not against — the Italian framework.

12–18 months before: cleaning up portfolios and crystallising gains

One of the most effective, yet often overlooked, pre-immigration strategies is portfolio clean-up before becoming Italian tax resident.

If you expect to become fully taxable in Italy on worldwide income and gains (outside any special regime), it can be extremely efficient to:

• Realise certain latent capital gains while you are still tax resident elsewhere, if that jurisdiction offers a lower rate or exemptions.

• Simplify complex portfolios with illiquid, hard-to-value or tax-inefficient assets which are difficult to manage under Italian rules.

• Exit investments that would create unfavourable Italian tax treatment, reporting burdens or wealth tax exposure.

Even if you are considering a favourable Italian regime, it is still worth asking:

• Are there assets that would be better held personally instead of via a company or vice versa?

• Do certain products, funds or wrappers trigger unfavourable classification once you are subject to Italian rules?

These are decisions that cannot be taken in the weeks before you move. They often require months of coordination, execution and, in some cases, negotiations with managers, banks and co-investors.

Rethinking holding companies and business structures

Many global families arrive in Italy with a patchwork of companies that made sense at a certain stage of their life: a UK holding company, a Luxembourg vehicle, a Swiss or Dubai family company, perhaps a personal service company or LLP.

From an Italian perspective, these structures can have very different consequences in terms of:

• Taxation of dividends and capital gains

• Controlled foreign company (CFC) rules

• Substance requirements in the foreign jurisdiction

• Exposure to Italian reporting and wealth taxes on foreign shares

Pre-immigration planning is the moment to ask difficult but necessary questions:

• Does each company still have a real business or investment purpose, or is it now a legacy vehicle?

• Is the jurisdiction still compatible with your future Italian residence in terms of treaties, reputation and compliance?

• Should certain activities be brought closer to Italy, or conversely kept outside the Italian perimeter?

In some cases, a corporate simplification — merging entities, closing dormant companies or restructuring ownership chains — can significantly reduce complexity, risk and future Italian tax leakage. But again, this requires time and coordination, not last-minute decisions.

Trusts, life insurance and succession planning

For international families, trusts and life insurance policies are often the backbone of wealth and succession planning. Italy, however, has its own specific view on:

• When a trust is considered transparent or opaque

• How distributions are taxed

• Whether foreign life insurance policies qualify as genuine insurance or as simple investment wrappers

If you already have trusts or policies in place, 12–18 months before your move is the ideal time to:

• Review trust deeds, letters of wishes and the role of protectors and investment advisors in light of Italian rules.

• Consider whether certain trusts should be amended, wound up or restructured before Italian residence.

• Analyse whether your life insurance policies still achieve the desired tax and estate planning effects once you are in Italy.

For families who do not yet have these tools, pre-immigration planning might be the right moment to introduce them, in coordination with the Italian framework, rather than trying to retrofit structures after the move.

Real estate: timing purchases and exits

Property is both emotional and strategic. Many clients start browsing villas in Tuscany or apartments in Milan long before the tax planning is done. From a pre-immigration perspective, it is worth separating two questions:

• Real estate you already own abroad: should some properties be sold before you move, to avoid future Italian tax on gains or rental income? Does it make sense to keep certain assets in a company rather than personal ownership? Are there inheritance law and forced heirship issues to consider across jurisdictions?

• Real estate in Italy: when is the right time to buy? Should the property be in your personal name, jointly with your spouse, via a company, or through a family structure? Are you planning to use it purely as a home, or also for rental or hospitality projects?

The answers may change depending on whether you will be under a special Italian regime or fully in the ordinary system. The key point is timing: decisions on buying or selling property are often driven by emotion and opportunity, but pre-immigration planning gives you the chance to align them with the wider tax and succession strategy.

Cash flow, currencies and banking set-up

Moving to Italy also means moving into the eurozone. Many HNWIs have assets and income denominated in USD, GBP, CHF or other currencies, and this can create significant volatility once Italian tax rules apply.

Months before the move, it can be helpful to:

• Define how much liquidity you want in euro versus other currencies.

• Decide from which accounts and jurisdictions you will draw your personal cash flow once you are in Italy.

• Coordinate private banking relationships in Italy and abroad, ensuring that reporting, documentation and compliance will work smoothly once you are tax resident.

This is not just about comfort; it can affect the timing of income recognition, the conversion of gains and the way your advisors structure portfolios and lending arrangements to support your Italian lifestyle.

Managing the timing of tax residence

One of the most delicate pieces of the puzzle is when, exactly, you become tax resident in Italy. For many families, the change of residence is not a single clean cut, but a gradual slide: more time in Italy, children starting school, a house being renovated, administrative registrations done at different moments.

Italian rules on tax residence look at a combination of factors over the year. Pre-immigration planning should therefore include:

• A clear target date or year for Italian tax residence, agreed among you and your advisors.

• A plan to manage the transition from your current country of residence, including any exit tax, deemed disposals or loss of benefits.

• An understanding of how double tax treaties may apply during the transition period if there is any overlap or conflict of residence.

Getting this wrong can mean unintended dual residence, unexpected exit taxes or the loss of beneficial regimes in both countries. Getting it right often requires simple but precise steps taken at the right time.

Coordinating an international advisory team

Sophisticated families rarely have just one advisor. There may be private bankers, wealth managers, tax lawyers, immigration specialists, trustees, accountants and family office teams spread across several countries.

Pre-immigration planning is the ideal moment to bring these people to the same table — literally or virtually — and ensure that:

• Everyone understands the Italian project and its timeline.

• Structures in one country do not create problems in another once you are in Italy.

• Documents, contracts and policies are consistent across jurisdictions.

A move to Italy is not only about complying with a new set of rules; it is about integrating them into your global strategy. That only works when advisors collaborate rather than operate in separate silos.

Turning Italy into an opportunity, not just a destination

Italy offers a unique combination of lifestyle, culture, education, healthcare and, for the right profile, interesting tax opportunities. But it is not a plug-and-play jurisdiction. The families who benefit most from Italy are those who start planning early, who respect the complexity of the system and who see the move not as a simple change of address, but as a strategic reorganisation of their global life.

If you are considering relocating to Italy within the next 12–18 months, this is precisely the right time to start the conversation.

At Knotted, we work at the intersection of relocation, tax planning and wealth structuring, helping international families transform a move to Italy into a coherent, long-term strategy.

If you would like to discuss your situation in confidence, you can reach us at info@knotted.ch or via WhatsApp at +41 76 771 30 22.