The deal settles a dispute between Italian tax authorities and Elkann, his brother Lapo and sister Ginevra, Turin prosecutors said yesterday.

At issue is the inheritance of their grandmother, Marella Caracciolo, widow of the former Fiat boss Gianni Agnelli and a legendary figure in Italy, that is estimated at around €1 billion (US$1.2 billion).

Prosecutors had accused the family of falsely claiming Swiss tax residence for their grandmother to avoid Italian inheritance tax.

Along with the payment, Elkann, who is chief executive of the family holding company Exor and also chairman of luxury automaker Ferrari, requested probation to avoid criminal prosecution, as is possible under an Italian law that provides for community service.

A judge must still agree to the community service for Elkann.

Prosecutors also asked for the cases against Elkann’s siblings and the notary of Caracciolo to be dismissed.

Elkann’s lawyer, Paolo Siniscalchi, said the community service agreed to by his client “does not imply any admission of liability”.

The wider inheritance dispute concerns Agnelli’s estate, following his death in 2003.

It pits his daughter Margherita Agnelli, who inherited €1.2 billion, against three of her eight children, who were named as heirs by their grandmother, Caracciolo.

In naming them, Caracciolo, who died in 2019, passed over Margherita Agnelli and her five other children from a second marriage.

She continues to pursue the annulment of his will in legal proceedings in Italy and Switzerland.

Her lawyer, Dario Trevisan, said in a statement that the settlement constitutes “an unequivocal admission of responsibility” by Elkann.