Many legal professionals who help families to set up trusts are unaware of the consequences where one or more of the beneficiaries is resident in Israel. Under Israeli law, all international trusts with Israeli resident beneficiaries are taxable in Israel. Since 2014, Israeli law imposes trust reporting obligations. In many cases the trustees are not aware that their trust, created in a different country, falls under Israeli tax jurisdiction, but ignorance of the law is no excuse and the beneficiaries may be disadvantaged for the trustees’ accidental non-compliance
Because trusts are not currently dealt with by Israel’s Double Tax Agreements, where the Israeli tax authorities treat a trust as Israeli and it is also considered to be ‘tax resident’ in another jurisdiction, it may be exposed to double taxation. These laws need to be fully understood by Israeli resident ex-patriates who are beneficiaries of a trust, and also by their families outside Israel, and the professional advisors assisting these families.
Anglo Capital Limited specializes in helping families and their advisors to understand and mitigate the effects of Israeli laws such as these. We also provide a broad range of compliance services to enable Jewish families around the world to structure their financial affairs in line with other relevant Israeli taxation rules.
To find out more about structuring trusts with Israeli resident beneficiaries, contact Philip Braude at Anglo Capital today.