The Assessment of Fiscal Aspects in the Generational Transition of Family Businesses.

The assessment of fiscal aspects in the generational transition of family businesses is fundamental for most small and medium-sized Italian enterprises. The family character of the companies constitutes a value in an economic sense, as recent studies underline, which highlight a higher profitability of family businesses compared to larger companies. Family businesses have an ethical value for their historical significance in the Italian economy, as recently reported in the newspaper “The Economist”, that includes 8 Italian companies, among the 15 (enterprises) of world renown, with more than 500 years of life. In Italian practice many legal instruments allow planning in an orderly way the generational transition of the family business, among them: the will, the donation, the family pact, the trust. It is expected a favorable tax treatment for these instruments, contained in article 3 (b) of Legislative Decree 346/1990, aimed at facilitating the generational passages which, under certain conditions, provides for the exclusion from taxation for transfers inter vivos or mortis causa (transfers of companies or branches of company, shares and shares). The Italian legislator has provided for this legislation to prevent the tax systems from damaging the companies during the inheritance, that is to say that the payment of taxes on succession or donation may endanger the financial balance of the company and therefore its own survival. This important facilitation in the field of tax on donations and successions was introduced under the Financial Act for 2007, art. 1, paragraph 78. The subject of this study are the fiscal aspects in the generational transition of family businesses taking into consideration the most widespread legal instruments in Italian practice in the management of the generational transition, in particular: the will, the donation, the family pact, the trust for which is provided a favorable tax treatment under the financial law of 2007, art. 1, paragraph 78.