Protect your funds from inheritance tax -Israel Taxation of trusts

How much of an Israeli trust is taxable?

As general rule if any distribution was made, Israeli beneficiary will report his income from the trust on his usual tax return (1301). The Trustee -Will usually report and will be taxed according to the individual tax rates with no exemptions, deductions or credits, but foreign tax credit. Exceptions to the trustee being taxed are: A- Attribution to beneficiary 75זז or creator - 75זח combining their private income with the distribution from the trust (accumulative tax with personal credits deductions and so).

B-The Creator or beneficiary were assigned to be the tax representative 75ו1 taxed as the trustee (a beneficiary will be such only in a Israeli testament trust) - individual tax brackets but no personal deductions and so.

Are trusts taxed at a higher rate? Depends on your personal tax rate If your income is low, the taxes will be lower than capital tsx rate

The creator- can be the taxable representative or combine his income with that of the trust when the creator is assigned as the taxable representative, The income of the trustee in a trust is not added to the income of the representing creator but rather retains its character As the trustee's income in the trust.