ITALY: New Clarifications concerning the taxation of Trusts and Beneficiaries

Examining the principal provision of Circular Letter No. 34/E

A trust is an instrument having extreme flexibility and adaptability. For those rea-sons, it is becoming more and more common in the field of estate and succession planning as a simple and effective solution to protect an individual's assets from uncertain events. It is customarily used in generational transfers of family assets and businesses, the achievement of charitable purposes, and the protection of vulnerable individuals. 
This article examines the principal provision of Circular Letter No. 34/E and provides a comprehensive view of the tax treatment of trusts in Italy. Several practical examples are discussed.