Tax issues for trustees of Australian trusts with Israeli beneficiaries 

Many Australians of Jewish descent will have established family trusts. It is likely that in some cases beneficiaries of those trusts will now be living in Israel.

In 2013 the Knesset brought in a new law that changed the rules for the taxation of income entitlements of Israeli resident beneficiaries of foreign trusts. Tax is now due whether or not those entitlements were paid, retained in the trust, or satisfied “in kind”.

The changes to the law apply as from 1 January 2014 and trustees of such trusts have reporting obligations to the Israel Tax Authority. 

The rules are somewhat complex, but this plain language article by Chaim Wigoda provides a useful guide -

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