Italian Taxation of Trusts

In its ruling no. 267, dated March 27, 2023 (Risposta-n.-267_2023.pdf), the Italian Tax Agency addressed a case involving a trust where the Settlor reserved the power to revoke and replace the Guardian and retained certain powers related to the shares of a company he transferred to the trust, including the power to appoint

The Italian Tax Agency recently issued a ruling (n. 251 of March 16, 2023) that provides guidance on the Italian tax classification of Family Trusts and Testamentary Trusts and the taxation of Italian beneficiaries on the trusts’ income.

Background

The settlor, an Australian national, established the trusts while he was a resident of

The Italian Tax Agency recently issued Ruling n. 237 of March 2, 2023 (Risposta-n.-237_2023.pdf), which clarifies foreign trusts’ tax treatment concerning Italian tax resident beneficiaries.

Under the ruling, when the trustee of a foreign trust is required to make an annual distribution to beneficiaries based on a predetermined percentage of the fair market