Trust as CFC

Controlled Foreign Companies (CFC) as defined in national tax legislations also include non-incorporated structures like trusts. Settlors of trusts will normally be recognized as controlling persons. Trust beneficiaries, in contrast, are not generally qualified as controlling persons unless they perform a special role or enjoy special powers giving them full access to the assets and income of the trust.

Taxation and reporting obligations in respect of the controlled trust are identical to those in respect of the controlled foreign corporations. At the same time, trusts may enjoy some additional benefits related to transfer of assets to a trust and/or taxation of the assets being distributed to the beneficiaries (family members of the settlor). 

MP Part will advise on matters concerning CFC rules application to trusts, settlors and beneficiaries, as well as on other aspects in relation to CFC legislation.