New Reporting Obligations For Trusts In Italy

What professional trustees and beneficiaries need to consider

Non-resident trusts under increased scrutiny

Italy was the first civil law country to ratify the Hague Trust Convention. This was followed by the introduction of express rules dealing with the tax treatment of trusts in 2007.

Overall, the statutory rules (coupled with low gift and succession taxes) are relatively benign and it has been possible to use trusts to defer income and capital gains tax by holding assets through non-Italian resident trusts (broadly, discretionary and irrevocable trusts that (a) are effectively managed abroad, (b) are not comprised mainly of Italian situate assets and (c) are not established in a blacklisted jurisdiction).