The so-called “contratto di mantenimento” (a kind of lifetime assistance agreement) is an agreement providing that one party undertakes to provide lifetime maintenance and assistance services to the other party in consideration of the transfer or an asset or capital.

Through this agreement, a person being not able to satisfy his/her own primary needs and necessities of life obtains, in consideration of the transfer of an asset or capital, rather than just money or fungible goods, also the direct fulfilment of different needs thanks to the personal activity of the counterparty, including board and lodging, cleaning, medical care and similar services. As well as ensuring safeguard and assistance services to the transferring party, the agreement also can guarantee the generational transition of the asset to the transferee.

The tax treatment of such an agreement for the purposes of direct and indirect taxation is difficult to determine, as it is not regulated by the Italian Civil Code and is not referred to by tax regulations. Such interpretation difficulties have fuelled discussions on the (possible) taxation of capital gains deriving from the transfer of goods received as consideration for the assumption of moral and material assistance, as well as disputes between tax authorities and taxpayers with regard to the application of the stamp duty.

Please contact Marco Pane and Alessandro Foderà for further information.