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Holding companies, tax-neutral rollover regime and donations to children: Tax Ruling no. 42/2026

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​​​​​​​published on 26 February 2026 | reading time approx. 3 minutes​


The recent Tax Ruling no. 42/2026 issued by the Italian Revenue Agency (Agenzia delle Entrate) offers important insights for those using holding structures in the context of corporate planning and generational handover, particularly when combining contributions under the tax-neutral rollover regime with donations of shareholdings.

The case

A father and his two children transfer, by a single deed, the entire share capital of two operating companies (Alfa and Beta) to a newly incorporated holding company (Newco S.r.l.) under the tax-neutral rollover regime pursuant to Art. 177, para. 2 of the TUIR (Consolidated Income Tax Act) — the so-called “induced neutrality” (Circular 33/E/2010): no capital gains are taxed immediately, and the shareholdings are recorded in the holding company at the transferors’ tax cost. As a result, the holding company’s net book value is significantly lower than the real economic value of the transferred companies. Subsequently, the father donates the bare ownership (nuda proprietas — ownership stripped of usufruct) of the holding company shares to his children under the ordinary gift tax regime pursuant to Art. 16 of the TUSD (Consolidated Inheritance and Gift Tax Act): the exemption under Art. 3, para. 4-ter of the TUSD is not applicable, as the donation concerns a non-controlling interest. The taxable base is therefore calculated on the holding company’s net book value, which is much lower than that of the underlying operating companies. The tax advantage is concrete and significant.

The logical approach of the Agency

The Agency applies the three-part test set out in the Guidelines issued by the Italian Ministry of Economy and Finance (MEF) on 27 February 2025: abuse of law under Art. 10-bis requires the cumulative fulfilment of three conditions. The absence of even one of them is sufficient to rule out abuse:
  1. “undue” tax advantage: established. The tax saving is contrary to the rationale of Art. 16 TUSD, which aims to measure the beneficiary’s actual taxable capacity (ref. Ruling no. 514/2019). The Agency explicitly qualifies it as “undue”;
  2. absence of economic substance: not established. The holding company has its own economic substance: it is capable of producing significant effects beyond mere tax savings. The non-tax purposes — unified management of the group, centralised treasury, prevention of family disputes, gradual generational handover — are genuine and documented. Decisive element: the articles of association include a concrete and detailed deadlock resolution clause, explicitly cited by the Agency as evidence of the transaction’s substance.

Since the second condition is not met, the analysis ends here: abuse is ruled out without the need to assess the third condition (essentiality of the tax advantage).

A critical open question

The Agency observes that the holding company’s net book value does not reflect the actual taxable capacity transferred. The observation is well-founded, but it reveals a broader systemic contradiction: even the net book value of any SME fails to capture the company’s real economic value, as it does not incorporate goodwill, intangibles, know-how or future earnings potential. The criterion set out in Art. 16 TUSD is inherently approximate, regardless of whether the entity concerned is a holding company or an operating company. The holding company amplifies the discrepancy but does not alter its nature. This is a systemic limitation that will require structural legislative intervention.

Operational implications

The ruling applies exclusively to the facts described in the application: the Agency reserves all powers of control over related acts or transactions not disclosed. Four essential points:
  1. genuine economic substance: real governance, documented management and coordination activities, concrete liquidity management. The deadlock resolution clause is necessary but not sufficient on its own;
  2. non-tax motivations evidenced by facts: shareholders’ agreements, board minutes, governance regulations, cash pooling contracts — not merely stated in notarial deeds;
  3. latent “trapped” capital gains: the immediate tax benefit does not eliminate future taxation. Capital gains will crystallise upon disposal of the holding company’s shareholdings and must be assessed in terms of the net present value of the deferral;
  4. scope of the ruling: in the case examined, all parties contributed the entire share capital. Partially different structures may be assessed differently.

Conclusi​​on

Tax Ruling no. 42/2026 confirms that a holding company can be an effective tool for generational handover when built on genuine economic substance. The question of the poor representativeness of net book value as the taxable base for gift tax purposes remains open: this is a systemic limitation affecting the entire legal framework, not just holding companies, and will sooner or later require legislative intervention.

Tax efficiency may be a beneficial outcome of the transaction — but it cannot be its sole purpose.

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Stefano Damagino

Certified Tax Consultant, statutory auditor (Italy)

Associate Partner

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