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28 July 2015

Taxation of trusts, part 6 - Testamentary trusts

A testamentary trust is one whereby the trust comes into existence as a result of the will of an Isrseli resident upon the death of the settlor.

Such a trust is taxed based on the residence of the beneficiaries.

If none of the beneficiaries are Israeli resident, the trust is deemed non-resident and hence exempt from Israeli taxation on income earned outside ISRAEL.

If however, there is one beneficiary who is an Isrseli resident, the entire trust is taxable. A noticeable exception will apply if the Isrseli resident beneficiaries are all within their ten-year exemption period - assuming of course that all income is earned outside Israel.

In a case where there is a single beneficiary, who is an Israeli resident, the beneficiary  can elect to have the income of the trust taxed in their own hands, rather than at the trust level.


  1. Hi,
    Thanks for sharing this info.In my View A testamentary trust is a legal arrangement created as specified in a person's will, and is occasioned by the death of that person. It is created to address any estate accumulated during that person's lifetime or generated as a result of a postmortem lawsuit, such as a settlement in a survival claim, or the proceeds from a life insurance policy held on the settlor.Estate Litigation Lawyers Sydney

  2. Great post!! One needs to remember that for a successful resolution of a case you do not necessarily need to hire an expensive lawyer. Experienced lawyers can also deliver good results. Thanks for sharing such kind of informative information...
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  3. Very informative post about Testamentary Trust.
    A testamentary trust is a trust established in your will and it usually begins operation when you die.Personal Property Securities Lawyers North Sydney