Israel generally taxes trusts in the same way as individuals, but depending on specific factors, trusts can be subject to distinct tax rules and reporting obligations. These factors include the residency status of the settlor and beneficiaries, as well as the location and nature of the assets held by the trust. Because they may be unaware of their reporting requirements under Israeli law, foreign trustees often fall into noncompliance and the associated penalties. Expert guidance is essential. STL will ensure that all reporting obligations are met, that tax liabilities are minimized, and that compliance is maintained, even in the most complex cross-border situations.
Services
Structuring: We design trust and estate structures that strategically reduce tax. Families with assets in different countries or with members residing across borders face particular complexities, and we know how to minimize conflicts and reduce the risk of double taxation. We also specialize in the transfer of Israeli real estate into a trust, a process that requires careful planning because of Israel’s unique tax laws.
Tax Advice for Trustees: Trustees bear significant responsibilities, including strict compliance with applicable tax laws. We provide trustees with comprehensive guidance on their tax and reporting obligations and make sure that they understand the regulatory requirements in each relevant jurisdiction. By helping to ensure compliance and prevent penalties or other legal consequences, we bring trustees the peace of mind that allows them to focus on their primary role, the responsible management of trust assets. For trusts that have inadvertently fallen out of compliance, we offer the pathway of voluntary disclosure programs. This service helps trustees and beneficiaries rectify past errors in reporting and resolve outstanding issues, potentially reducing penalties and avoiding criminal liability.
Restructuring because of Changes in Personal Circumstances: We help to restructure trusts when the settlor or beneficiaries experience significant changes, such as a shift in tax status or a relocation to a new country. By accounting for the tax implications that arise from the change, this service ensures that trusts remain tax-efficient and legally compliant. Our proactive restructuring will help you avoid unnecessary tax liabilities and preserve your trust’s value for future generations.
Legal Opinions: We offer detailed legal opinions for clients who need a thorough evaluation of their trust’s structure and tax implications.