Trusts are still alien to the Italian legal system as they are
essentially based on concepts in contrast with the Italian general
principles on ownership. As the Italian legal system does not have
a definition of trust, the Hague Convention has provided one,
together with rules to be applied by Italian judges in the presence
of conflicts in case of assets in trust located in Italy.
At the end of 2010 the Italian tax authorities released a
circular letter in which they outlined a number of scenarios in
which they would effectively disregard trusts (by treating them as
'fictitious interpositions'). In the presence of trusts,
the assets concerned are in the trustee's name but do not
belong to him, forming a group of independent assets which,
although administered by the trustee under the terms of the trust
deed and the rules governing such trust, are not part of the
trustee's assets: this scenario is potentially seen as a tool
that, given its opaque characteristics, can be used for illicit
purposes (for instance, to avoid the payment of tax or to hide the
identity of the actual owners of the assets concerned).
Italy was the first civil law country to ratify the Hague Trust
Convention of 1 July 1985. This was followed by the introduction of
express rules dealing with the tax treatment of trusts in 2007: the
Fiscal Bill 2007 has inserted the definition of Trust in Italian
tax legislation and in the current article 73 of Italy's Income
Tax Consolidated Text (Testo Unico delle Imposte sui Redditi
– TUIR). These provisions have been further clarified with
financial ministerial circular 48/E which was issued on 06 August
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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