23 July 2020 - Events
In the UK and in Italy, recent changes in the taxation of trusts have made estate planning more complicated.
In Italy, trusts will now be treated as companies. The new law is designed to catch tax avoidance schemes that fictitiously locate trusts outside the country even though they have an Italian settlor, Italian beneficiaries and Italian assets. Trusts will now be treated as residing in Italy if their place of administration is in Italy or their principal object is carried out in Italy.
In the UK, the Finance Act of 2006 changed the inheritance tax rules concerning trusts. Most trusts (whether grantor trusts, life interest trusts or discretionary trusts) are now subject to an entry charge of 20 percent and 6 percent (with limited exceptions) every decade.
New rules for UK residents who are domiciled elsewhere took effect in April, tightening tax requirements for those who make significant income or gains outside the country. The most dramatic of these requires “non-doms” who have lived in Britain for seven years to pay a £30,000 annual charge to continue to be taxed on a remittance basis.
Our attorneys can assist families and family offices in mitigating the impact of these new rules.