Generational Transition Through Family Pact: The Court Clarifies

The family pact is an institution that allows for effective planning of the generational transition of the family business, but it still presents some issues from a tax perspective. The jurisprudence of the Court of Cassation seems to have settled on the tax treatment of compensations granted to designated beneficiaries who are not assignees in the family pact, treating them as donations from the grantor and excluding the application of the exemption from gift tax provided for in Article 3, paragraph 4-ter, of the TUS. While the first conclusion is more favorable for the taxpayer compared to the previous jurisprudential orientation, the second leaves some doubts regarding the justification for the exclusion from the exemption in the face of a case that has a unitary character. This is discussed by our Matteo Tambalo and Chiara Chirico in issue 10/2023 of Amministrazione & Finanza (IPSOA – Wolters Kluwer).