Tax efficient investments for Expats in Italy

After living in Italy for many years, I have started to understand a few of the more Italian ways of life.  There is no need to write about food, drink, beach, mountains when it can be written about so beautifully by others.  However, my personal favorite ( surprise surprise), is the Italian pastime of avoiding taxes.  I am sure that you are aware that there is a fine line between tax evasion and tax avoidance and therefore I don’t think I need ot state the difference between the two.

Well fortunately, for we expats, who never quite get to grips with the fancy tax avoidance schemes for the Italian,  we are fortunate enough to have access to an English language Italian compliant tax efficient scheme all of our own.  The International Life Assurance Investment Bond.

For expatriate residents in Italy, a Life Assurance Investment Bond can provide a highly tax efficient and cost effective method of building and managing an investment portfolio. You can access a wide range of different International investment funds and cash deposits as well as individual shares, corporate and government treasury bonds quoted on any recognized exchange.

One of the most significant advantages of an Assurance Bond for Italian residents is that you can buy and sell the assets in the Bond without creating an immediate tax charge and if you are drawing investment income then taxes can be as low as 20%. (It has been increased to 20% in the recent Austerity budget).  All of your investments are on one statement which means that you can easily monitor your investment portfolio at a glance

In addition it has the added benefits of being able to purchase many International investment funds at significant discounts, as opposed to buying them directly from banks or investment houses.  And has access to a wide range of financial instruments, some of which are tax free.

The Life Assurance Investment Bond also acts as a great tool for Inheritance tax planning purposes, to ensure that your assets are passed onto your nominated beneficiaries with the least complication.

However, a word of caution!  Offshore tax havens offering this type of vehicle are blacklisted in Italy so any withdrawals from them would be subject to considerable tax charge and possible penalty should you need to draw an income or a one off withdrawal.  Compliant jurisidictions offer the best opportunities for tax compliant investment in Italy.