What the Supreme Court said about trusts and taxes
The intervention of Corrado Sforza Fogliani, president of the Confedilizia Study Center, on trusts and taxes
With the ordinance n. 28400 of October 15, 2021, the Court of Cassation has returned, for the umpteenth time, to deal with the ever-lively debate on trusts and taxes on a fixed and / or proportional basis.
The Court has preliminarily reiterated that the trustee, with the appointment, acquires the ownership of the assets conferred in the trust, but does not enjoy the typical faculties of the owner and, therefore, does not acquire any advantage for himself, assuming the ownership of such assets only for to be able to carry out the management and disposition actions necessary to achieve the purpose for which the trust was established.
As a consequence of this, regardless of the different purposes for which the trust can be used (succession, family, liquidation, etc.), what is relevant, for the purpose of identifying the amount of taxes due, is the abstract mechanism present every time in which this negotiation operation is carried out.
The transfer therefore takes place but is only instrumental, because it is aimed at pursuing the purposes indicated in the deed of incorporation of the trust, which does not increase the personal assets of the trustee, because the transferred assets remain separate, and segregated, being destined to remain temporarily under the control. of the trustee before the destination to the final beneficiaries.
This is why – the Court continues in motivating its decision – "neither the institution of the trust nor the conferral of the assets that constitute its endowment into it integrate, on their own, a taxable transfer, constituting instead neutral acts, which do not give rise to to an effective and stable passage of wealth ".
It is therefore the instrumentality of the trust deed and endowment of the trust that justifies, at a fiscal level, neutrality, taking into account that the wealth index, to which the application of the tax must always be linked, does not take shape before the trust has carried out its function.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/cosa-ha-detto-la-corte-di-cassazione-sul-vivace-dibattito-su-trust-e-imposte/ on Sat, 09 Jul 2022 05:06:06 +0000.