TRUST: TAXATION AFTER PATRIMONIAL INCREASE

The Italian Court of Cassation, issued a new ordinance (no 1131 of 17 January 2019) about the taxation of the assets conferred in Trust. In particular, The Court clarified that the transfer of fund is subject to taxation only when there is an effective patrimonial increase for the beneficiary, in other words, when there is a distribution to beneficiaries. Consequently, the goods and rights conferred in a trust with not definitive ownership, don’ t have to pay taxes because there is not an effective enrichment, so it’s applicable the “Fixed Tax”.

Currently this issue is discussed. In fact, the same Court of Cassation, in this judjement, did not consider the declaration no. 734/2019 issued a few days before. With this document, the judge established the application of a proportional taxation of trust in which it occurred a transfer of assets from the settlor to the trust and the beneficiaries are identified.

 A clear intervention of the Legislation about trust taxation is expected, especially considering the “rumors” about an increase of the rate for inheritance and gift Tax in Italy.

Our staff is available for any clarification.