October 15, 2013 - Foreign-resident settlor trusts were in general exempt from Israeli Income Tax on foreign income. A new law is changing this as of January 1, 2014.
The main points of the new law are:
| - | On the death of a foreign settlor, the trust assets and income will be deemed those of the beneficiaries. In the event one of the beneficiaries is a resident of Israel, the trust too will be considered Israel-resident as of the date of death of the settlor and be subject to Israeli taxation. |
| - | The trustee of family trusts may elect to pay 25% on the taxable income of the trust or 30% on distributions, excluding the assets settled by the settlor into the trust (the capital). |