Successione, il trust non è soggetto passivo
Article of Andrea Vicari
The idea that a trust “disregarded” (or “interposed”) for income tax purposes should be treated the same under inheritance and gift tax law was first advanced by the Italian Revenue Agency in Circular 34/E (2022).
This stance has since drawn widespread criticism from scholars and practitioners alike. The issue has now resurfaced in a recent position paper by STEP Italy (12 May 2025).
While I agree with the paper’s overall conclusions, some aspects of its reasoning require closer scrutiny. I’ve explored these in my monograph Il Guardiano ed il Trust Interposto (Giuffrè, 2025) and in a recent article for Il Sole 24 Ore (29 May), attached.
One crucial, yet often overlooked, point is Article 47(1)(d-bis) of the Inheritance and Gift Tax Act (TUSD). In my view, this provision is central to the tax treatment of trusts in this context. It plays a role similar to Article 37(3) of the Income Tax Act, but is specific to inheritance and gift tax.
Unfortunately, it has been largely ignored—even by the tax authorities, who instead focus on the broad and vague concept of “interposition.”
But Article 47 deals with simulation, not interposition. This is a critical legal distinction. Under Article 47, the Revenue Agency can disregard sham transactions without initiating civil litigation—but only where true simulation is proven. That means there must be a hidden agreement nullifying or modifying what is formally declared in the trust deed or the act of funding.
This differs significantly from the modern tax notion of a “disregarded entity,” which can apply even to real (non-fictitious) structures. Simulation, by contrast, requires intent to deceive, proven through a concealed counter-declaration.
It’s also vital to recognise that the trust itself is not a taxable person under the inheritance and gift tax regime. Therefore, it cannot be “disregarded” in the same way as under income tax law. The key provisions for disregarding entities in income tax—Articles 73 of the TUIR and 37(3) of Presidential Decree No. 600/1973—apply exclusively to income taxes. The Italian Supreme Court confirmed this in Cass. 3986/2021, rejecting any analogical extension of these rules to other taxes.
Inheritance and gift tax follow different principles. The taxable events, liable persons, and rules for assessments all diverge from those of income tax. Assuming they work in parallel ignores both the letter and logic of Italian tax law.
In short: only in cases of real, provable simulation—not mere interposition—can a trust be disregarded under Article 47 for inheritance and gift tax purposes.
The idea that a trust “disregarded” (or “interposed”) for income tax purposes should be treated the same under inheritance and gift tax law was first advanced by the Italian Revenue Agency in Circular 34/E (2022).
This stance has since drawn widespread criticism from scholars and practitioners alike. The issue has now resurfaced in a recent position paper by STEP Italy (12 May 2025).
While I agree with the paper’s overall conclusions, some aspects of its reasoning require closer scrutiny. I’ve explored these in my monograph Il Guardiano ed il Trust Interposto (Giuffrè, 2025) and in a recent article for Il Sole 24 Ore (29 May), attached.
One crucial, yet often overlooked, point is Article 47(1)(d-bis) of the Inheritance and Gift Tax Act (TUSD). In my view, this provision is central to the tax treatment of trusts in this context. It plays a role similar to Article 37(3) of the Income Tax Act, but is specific to inheritance and gift tax.
Unfortunately, it has been largely ignored—even by the tax authorities, who instead focus on the broad and vague concept of “interposition.”
But Article 47 deals with simulation, not interposition. This is a critical legal distinction. Under Article 47, the Revenue Agency can disregard sham transactions without initiating civil litigation—but only where true simulation is proven. That means there must be a hidden agreement nullifying or modifying what is formally declared in the trust deed or the act of funding.
This differs significantly from the modern tax notion of a “disregarded entity,” which can apply even to real (non-fictitious) structures. Simulation, by contrast, requires intent to deceive, proven through a concealed counter-declaration.
It’s also vital to recognise that the trust itself is not a taxable person under the inheritance and gift tax regime. Therefore, it cannot be “disregarded” in the same way as under income tax law. The key provisions for disregarding entities in income tax—Articles 73 of the TUIR and 37(3) of Presidential Decree No. 600/1973—apply exclusively to income taxes. The Italian Supreme Court confirmed this in Cass. 3986/2021, rejecting any analogical extension of these rules to other taxes.
Inheritance and gift tax follow different principles. The taxable events, liable persons, and rules for assessments all diverge from those of income tax. Assuming they work in parallel ignores both the letter and logic of Italian tax law.
In short: only in cases of real, provable simulation—not mere interposition—can a trust be disregarded under Article 47 for inheritance and gift tax purposes.
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