A change in Italian inheritance regulations may affect the way family businesses in the country deal with a generation shift, making it easier for owners to transfer the majority of a company’s shares to a selected member of the family.
Under current quota rules called legittima, direct decedents are entitled to 50% or 75% of family assets, depending on whether they have to share the inheritance with the deceased’s spouse or not.
The legittima is divided in equal parts between all the heirs, while the owner can choose how to share the remaining assets.
According to Aidaf, the Italian family business association that proposed the law change, this means that family business owners cannot give the majority of the company’s shares directly to one of their heirs.
“At the moment, even if an entrepreneur thinks that one of his children is more suitable than the others to manage the family business, he can’t give him or her a preference over the others,” Aidaf president Gioacchino Attanzio told CampdenFB.
“If approved, the new legislation would give one of the children the possibility to control the majority of the company’s shares and therefore to manage the firm more effectively,” he added.
“In addition, the new law will improve the company’s capitalisation because whoever inherits the firm won’t have to give up capital in order to buy the other family members’ shares.”
The law, which is part of a set of economic development measures that the Italian government is expected to approve in the next few weeks, has been accused of being an ad personam law for the country’s prime minister, Silvio Berlusconi.
The new regulation is believed to benefit Berlusconi, whose fortune is worth about €6 billion, because it would allow him to give preferential treatment to his two eldest children, Marina, 45, and Piersilvio, 42, over the three youngest – Barbara, 27, Eleonora, 25, and Luigi, 23 – who he had with his second wife Veronica Lario.
Since the early 1990s, Marina and Piersilvio have held several positions in their father’s media empire. Today, Marina is the chairman of both Fininvest, the family's financial holding company, and Mondadori, Italy’s largest publishing group, while Piersilvio is deputy chairman of television network Mediaset.
“Every family business owner, and small and medium-sized ones in particular, will take advantage of this law, not just Berlusconi,” Attanzio said rejecting the accusation.
In a recent interview to Milan-based Corriere della Sera, he pointed out that only 30% of Italian family businesses pass to the second generation, and only 15% to the third.
“The main problem is that generation shifts are often not sufficiently planned,” he said.
Aidaf’s members include some of the country’s most famous family businesses, such as Ferragamo, Tronchetti Provera, Merloni and Mapei’s owner Squinzi. Together, they contribute about 10% of Italy’s GDP.