Taxation on Trusts

Taxation on Trusts

CSB Group offers professional tax planning for individuals as well as companies. We also provide full trust management and administration services and comprehensive tax and legal guidance and support in respect of all trust-related matters. CSB Trustees & Fiduciaries Limited (a member of CSB Group) is licensed by the Malta Financial Services Authority (MFSA) in terms of the Trusts and Trustees Act to provide trust and fiduciary services.

Malta Tax Treatment of Settlements

No Malta tax would be chargeable upon a settlement of property on trust when:

  • The settler is not ordinarily resident and domiciled in Malta for Malta tax purposes and the assets settled on trust are situated outside Malta; or
  • The assets settled on trust do not represent chargeable assets in terms of Malta’s tax on capital gains (that is, immovable property, securities (excluding securities having a fixed rate of return), business goodwill, copyright, patentstrademarks, trade-names and the full or partial beneficial interest in a trust).

Malta Tax Treatment of Trustees

The trustee of a trust would be wholly transparent for Malta tax purposes (such that all income and gains otherwise attributable to the trust would be deemed to have been derived directly by the beneficiaries of the trust) when:

  • none of the beneficiaries are persons ordinarily resident and domiciled in Malta; and
  • the relevant income and gains have a foreign source for Malta tax purposes and/or comprise Malta source interest, royalties or gains realised pursuant to the disposal of shares in a Maltese non-property company.

Likewise, the trustee of a trust would be wholly transparent for Malta tax purposes (such that all income and gains otherwise attributable to the trust would be deemed to have been derived directly by the beneficiaries of the trust) when:

  • none of the beneficiaries are persons resident in Malta; and
  • the relevant income and gains comprise dividends distributed by a Malta company and/or have a foreign source for Malta tax purposes and/or include Malta source interest, royalties or gains realised pursuant to the disposal of shares in a Maltese non-property company.

Should a Malta trustee not qualify for fiscal transparency, then all income and gains attributable to the trust would be chargeable to tax in Malta at the flat rate of 35% when at least one of the trustees of that trust is a person resident in Malta for tax purposes.

Malta Tax Treatment of Transfers of Beneficial Interests

No Malta tax would be chargeable upon any transfer by a beneficiary of his/her beneficial interest in a trust when:

  • the trust property does not include any chargeable assets; or
  • the transferring beneficiary is not ordinarily resident and domiciled in Malta and the trust property does not include any chargeable assets.

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