Moving from the UK to Italy: timing, tax and your British assets. We plan the date of the move, your UK pensions, property and ISAs, and the Italian regime that fits you.
The single most expensive thing about moving from the United Kingdom to Italy has nothing to do with rates. It is that the two countries run on different calendars and different rules about when residence begins and ends, and unlike some of Italy's other treaty partners, Britain has no agreement with Italy on how to split the year between them.
Handled early, that is a scheduling exercise. Handled late, it is a period during which both countries consider you resident and tax the same income, with relief only through a treaty procedure. Everything else on this page (property, pensions, ISAs, reporting) sits downstream of that one decision.
British taxpayers are used to the idea that a tax year can be divided. Under the Statutory Residence Test, someone leaving the UK part-way through the year can qualify for split-year treatment, so that only the UK part is taxed as a resident.
Italy does not work that way. Italian residence is decided for the whole calendar year: if you meet one of the tests for more than half of it, you are resident for all of it, from 1 January. Some of Italy's treaties fix this with an express split-year clause (with Germany, Switzerland and Panama), but not the treaty with the United Kingdom.
The overlap is not fatal. Where two States both claim residence, the treaty tie-breaker decides: permanent home, then centre of vital interests, then habitual abode, then nationality, then agreement between the authorities. But a tie-breaker is an argument you have to win on evidence, years later, not a rule that operates automatically.
Which is why the date of the move is the first thing we discuss, not the last. Arriving after early July, so that fewer than 183 days fall within the Italian year, usually removes the problem. Arriving in May, with a UK employment that ran to April, usually creates it. The difference is a few weeks and often a five-figure sum.
The Italian side of a move is only half the file. On the British side there is a sequence that is easy to complete and expensive to skip. None of it is difficult: it simply has to be done in the right order, and the right order depends on the date you have chosen.
The first is the day count. Someone who has been UK resident for more than three tax years faces a much tighter limit on the nights they can still spend in the UK, and the limit falls further with each tie they keep.
The second is the temporary non-residence rule. If you resume UK residence after only a short absence (five years or less), certain gains, distributions and remittances made while you were away can be pulled back into UK tax in the year you return. Italy as a five-year experiment is a very different proposition from Italy as a permanent move.
There is also a middle path. Where ceasing UK residence outright is not practical, an individual with closer connections to Italy may be treaty-resident in Italy under the tie-breaker while remaining UK resident domestically. It is workable, and it needs to be designed rather than discovered.
Italy treats you as resident if, for more than half the calendar year, you are registered with the Anagrafe, have your domicile or habitual abode in Italy, or are physically present here. Since 2024, domicile means the place where your personal and family relationships principally develop, so where your spouse and children live counts for more than where your assets sit. We explain the four residence tests in a dedicated guide.
From that point Italy taxes your worldwide income, and your British income does not stop being taxable simply because HMRC has already seen it.
This is where British owners are most often caught out, and the reason is Brexit rather than any change in Italian policy. Italy charges IVIE, a wealth tax on foreign real estate, at 1.06% of value. For properties in the EU and EEA, the taxable base can be the local cadastral value, usually a modest figure. That option is reserved to EU and EEA States, and the United Kingdom is now neither.
The council tax valuation can no longer be used, so the base becomes acquisition cost or market value: for a London property bought decades ago, potentially a very different number. And council tax is not creditable against IVIE, because the credit is for foreign wealth taxes and council tax is a charge for local services.
None of this makes keeping a UK property unwise: for many clients it remains the right decision. But it is a real annual cost that belongs in the model before the move, alongside the rental income, which is taxable in Italy with relief for the UK tax, and UK capital gains tax, which still applies to non-residents' disposals of UK land.
British pensions are among the most valuable things a client brings to Italy, and among the easiest to mishandle. As a general rule, private and occupational pensions are taxable only where you live, so in Italy once you are resident. Government service pensions are the exception: pensions for service to the Crown or a local authority generally remain taxable in the UK, which changes the arithmetic for former civil servants, armed forces, NHS and teaching staff.
Then there is the pension commencement lump sum. A British saver expects to take 25% tax-free, but that is a feature of UK law and Italy does not mirror it. Taking it after becoming Italian resident is a materially different decision from taking it before, and one of the few genuinely irreversible choices in this area.
A SIPP or a defined-benefit pension can also open the door to the 7% regime for foreign pensioners: a flat 7% on all foreign income for ten years, if you move to a qualifying town. Transferring a UK pension abroad is a separate question again, with its own charges and Italian consequences, and worth analysing on the facts rather than adopting by default.
An ISA is a UK tax wrapper, and Italy does not recognise it. Once you are Italian resident, the interest, dividends and gains inside it are taxed under ordinary Italian rules as though the account did not exist, the account is reportable in the Italian return, and it is subject to IVAFE at 0.2% of value. Premium Bond prizes and other products built around UK reliefs raise similar questions.
Reviewing what to keep, what to unwind and when is a conversation for the months before the move, while you are still UK resident.
The Italian return requires you to report foreign assets held at any point in the year in the RW section: UK bank and building society accounts, investment accounts, ISAs, property, shareholdings, policies with a surrender value and crypto. It applies whether or not the asset produced income, and penalties run from 3% to 15% of the undeclared value. IVIE and IVAFE are settled in the same section. We handle the whole cycle through our tax return preparation service, including the first Italian return, which is invariably the difficult one.
Brexit did not end social security coordination between the United Kingdom and the EU. The withdrawal arrangements include a protocol that continues to assign a worker to one system rather than both, so a British employee posted to Italy can, in defined circumstances, remain in the UK system with the appropriate certificate. The rules are narrower than before Brexit and differ for employees, posted workers and the self-employed: settle them before the first payroll runs.
Italian succession tax is charged at low rates with generous allowances between close family members. UK inheritance tax is charged at a much higher rate above a threshold, and since April 2025 the trigger for worldwide assets is long-term residence rather than domicile. Someone resident in the UK for at least ten of the previous twenty years remains exposed on non-UK assets for a period after leaving, between three and ten years depending on how long they were resident. UK-situated assets stay within the charge regardless of where you live.
There is also a difference that has nothing to do with tax. English law gives you testamentary freedom; Italian law applies forced heirship, reserving shares of an estate to close family, which can override an English will. Wills usually need revisiting as part of the move. For clients with substantial assets on both sides, this is planned in parallel with the move, not left to the executors.
The end of the UK's non-dom regime has made comparison unavoidable, and Italy has become one of the obvious places to compare with. Alongside the 7% regime there is the lump sum tax for high-net-worth individuals: a fixed €300,000 a year covering all foreign income, for up to fifteen years, for people who have not been Italian resident in nine of the previous ten years, with an extra €50,000 for each family member included.
Two features are worth knowing before you count on it. Gains on substantial shareholdings realised in the first five years sit outside the regime and are taxed under ordinary rules. And the regime can be confirmed in advance: a ruling may be sought from the Revenue Agency before you become resident, and asking does not commit you to moving. The ruling can also address how a holding company or a trust will be treated and, in the right circumstances, the five-year carve-out.
The inbound workers regime suits people still working; the 7% regime suits pensioners prepared to live in the right places. We model all three against your actual figures before recommending any of them.
A UK–Italy move needs one adviser who can see both halves at once: the Statutory Residence Test and the Italian 183-day rule, HMRC and the Agenzia delle Entrate, the pension you are about to draw and the Italian return it will land in. Avv. Marco Mesina, a member of the Milan Bar (Ordine degli Avvocati di Milano) and formerly of Deloitte and Withers, advises British clients across the UK and Italy, working alongside your UK accountant and IFA rather than replacing them. Non-EU nationals will usually also need a visa, such as the Elective Residency Visa, which we coordinate with the tax plan. Most of the value is delivered before you move.
No. Italian residence is decided for the whole calendar year, and the Italy-UK treaty has no split-year clause. Where both countries claim you, the treaty tie-breaker decides, which is why the timing of the move matters so much.
For most people, after early July, so that fewer than 183 days fall within the Italian year and Italian residence begins the following January. It is not a universal rule, but it is the right starting point.
IVIE applies at 1.06% on acquisition cost or market value, since the council tax valuation can no longer be used after Brexit, and council tax is not creditable. Rental income is taxable in Italy with relief for UK tax, and UK capital gains tax still applies on disposal.
Private and occupational pensions are generally taxable only where you live, so in Italy. Government service pensions generally stay taxable in the UK.
The exemption is a feature of UK law and Italy does not mirror it, so taking the lump sum before or after becoming Italian resident are very different decisions.
No. Italy does not recognise the ISA wrapper: the income and gains are taxed under ordinary Italian rules, the account is reported and it is subject to IVAFE at 0.2%.
Not always. The post-Brexit protocol assigns you to one system, and a posted employee can in defined circumstances stay in the UK system with the right certificate.
Avv. Marco Mesina
Founder, Move to Dolce Vita · Avvocato, Milan Bar (Ordine degli Avvocati di Milano)
Marco is an Italian tax lawyer who advises individuals and families relocating to Italy on tax regimes, residency, citizenship, real estate and succession planning. Before founding Move to Dolce Vita he worked at Watson Farley & Williams, Withers and Deloitte in Milan.