ARTICLE · 14 MARCH 2016

New Tax Guidelines – Immovable Property Settled On Trust

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Thus, although the immovable property would have been acquired by the trustee rather than by the settlor, the property so acquired would still be deemed to have been settled on trust by the settlor.

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The Maltese Inland Revenue recently published two Tax Guidelines providing an interpretation as to when immovable property can be deemed to have been settled on trust for Maltese income tax and stamp duty purposes.

These interpretative Guidelines were necessary since Article 32B(1)(f) and 32C of the Duty on Documents and Transfers Act (the "DDTA") and Article 5 and 5A of the Income Tax Act (the "ITA") refer to situations where the immovable property itself is settled into the trust. No specific mention is made in the ITA or DDTA of typical scenarios where cash is settled by the Settlors or through a loan to the Trustee, and the cash is then used by the Trustee to acquire the immovable property.

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