Testamentary Trust Italian Tax Code (Codice Fiscale)

Testamentary Trust Italian Tax Code (Codice Fiscale)

Under the Australian legal system it is common practice to establish a testamentary trust to manage the testator's assets after their death.

Since under the Italian law there is no law governing trusts, a coordination issue arises between the two legal systems, the Italian and Australian.

The first of these issues concerns the requirement for an Italian tax code issued in the name of the trust/trustee, which is essential for filing the deceased's succession declaration and thus assigning the assets to the trust/trustee.

In this guide, we explain what a tax code is, what it is used for, and how to apply for it in the presence of a testamentary trust through a representative in Italy.

Declaration of Inheritance

When you receive an inheritance in Italy, to become the owner of the assets, you must file a declaration of inheritance with the Revenue Agency. This document is requested to inform the Tax Office of the assets the beneficiaries are inheriting and to pay any inheritance taxes.

To finalize this procedure, all parties involved in the inheritance must have an Italian tax code.

In the specific case of a testamentary trust, a tax code is required for the following subjects:

- the deceased;

- the trust;

- the trustee;

- the beneficiary.

What is a tax code?

The tax code is an alphanumeric code for individuals and a numeric code for entities other than individuals, such as trusts. It serves to uniquely identify each individual in their dealings with the public administration, banks, private individuals, and Italian entities.

What is a tax code used for?

The tax code is required for:

- signing contracts (sale, rental, lease, loan, etc.);

- opening a bank account in Italy;

- paying taxes and duties;

- accepting an inheritance;

- requesting loans or grants.

Without a tax code, it is not possible to fulfil to legal or tax obligations in Italy.

How to apply for a tax code from Australia

Individuals residing in Australia (Trustees and Beneficiaries) can obtain a tax code through the Italian Consulates. Each Consulate has jurisdiction over a specific geographic area:

Consulate	Area of ​​Competence
Sydney https://conssydney.esteri.it	New South Wales (except Queanbeyan e Cooma), Norfolk Islands
Melbourne https://consmelbourne.esteri.it	Victoria e Tasmania
Adelaide https://consadelaide.esteri.it	South Australia
Brisbane https://consbrisbane.esteri.it/it/	Queensland e Northern Territory
Perth https://consperth.esteri.it/it/	Western Australia, Christmas Islands e Cocos (Keeling) Islands

Consulates do not issue tax codes to trusts. Therefore, it would be necessary to appoint a professional in Italy to request one on behalf of the trust.

Procedure for Requesting a Tax Code for a Trust

To obtain a tax code for a testamentary trust,

• an application to the Italian Revenue Agency (Agenzia delle Entrate) shall be filed by

• filling in a specific form together with

• a proxy issued by the Trustee to the designated professional, along with

• documentation proving the establishment of the trust and

• the appointment of the Trustee, and

• a copy of the identification documents of the Trustee and the delegated professional.

Conclusions

Finalizing a testamentary trust is possible, but requires good organization.

The first essential step is obtaining an Italian tax code, which is essential for completing the inheritance declaration and transferring ownership of assets.

In the presence of a testamentary trust, the process can be relatively simple if handled in Italy by a competent professional, i.e., a professional who knows the Australian law and is familiar with the law of trust.