Italy’s Supreme Court Rules That No Transfer Taxes Apply to The Transfer of Property Into a Trust: Is That True Also For The Gift Tax?

With its ruling n. 975 issued on January 18, 2018 Italy’s Supreme Court held that the transfer of an asset (real estate property) to an irrevocable trust falls outside the scope of Italy’s registration, cadastral and mortgage taxes (transfer taxes), charged at the aggregate rate of 10 percent, on the theory that it is a transitory step before the final transfer of the property to the beneficiaries of the trust actually occurs, at which time the transfer taxes should apply. The ruling is consistent with a previous decision of the Supreme Court on the same issue, that is, ruling n. 21614 of October 26, 2016 (which we also commented upon on this blog). The question is whether the ruling extends to the gift tax, which replaces the registration tax for gratuitous transfers taking place from October 25, 2006. The ruling concerns facts occurred before the reenactment of Italy’s estate and gift tax. The issue in front of the Court was to determine whether…

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