{"id":8546,"date":"2025-10-05T06:10:49","date_gmt":"2025-10-05T06:10:49","guid":{"rendered":"https:\/\/aboulafia.co.il\/?p=8546"},"modified":"2025-10-05T06:10:49","modified_gmt":"2025-10-05T06:10:49","slug":"taxation-of-trusts-clarification-from-tax-authority","status":"publish","type":"post","link":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-trusts-clarification-from-tax-authority\/","title":{"rendered":"Taxation of trusts \u2013 clarification from tax authority"},"content":{"rendered":"

A few weeks ago, the tax authority published a circular regarding the taxation of trusts, expanding on some of the definitions and rules set down in the revised laws as of 1.1.2014 \u2013 and including some important clarifications regarding some of the tax issues that had been raised. The entire thing is over 50 pages, so if you\u2019re bored, take a look at the original\u00a0here<\/a>.<\/p>\n

Here are some of the clarifications given:<\/p>\n

We discussed in a previous\u00a0post\u00a0<\/a>the issue of tax being paid on trust income by different taxpayers. The circular clarifies that, in almost all cases, the tax paid to a foreign tax authority on the trust income will be available for offset against the Israeli tax due \u2013 irrespective of whether the taxpayer in either country is the trust itself, the settlor or the beneficiary.<\/p>\n

Where the income of a trust is taxed in the hands of the settlor or beneficiary, the income is treated as that person\u2019s for any and all matters. This includes them being able to offset losses against the income, exemptions that may be applicable (including for disability), as well as the calculation of the tax due.<\/p>\n

The largest area of clarifcaiton revolves around Relatives Trust (see\u00a0here\u00a0<\/a>for more)<\/p>\n