The decision
A trust does not move when a family does. The trustee, the governing law and the assets stay where they are; what changes is the country that looks at the trust through the eyes of its new residents. Moving the settlor or a beneficiary into a new tax system can switch on attribution of the trust's income to someone who receives nothing, turn a distribution into a different kind of income, open a register entry, or leave behind a claim in the country left. None of this requires anyone to sign a new deed.
The question on this page is therefore not where the trust should be — that is covered in Trust Jurisdictions — but what twelve destination countries do on arrival and what the country of departure keeps. How each system taxes a trust in steady state is set out in Trust Taxation; whether the civil law of the destination recognises the trust at all is in Recognition of Foreign Trusts. What follows is the event of moving. A life policy held by the trust, or held directly alongside it, is re-tested on the same move under the residence country's insurance rules, which are compared in Insurance Wrapper Jurisdictions.
Who moves decides which rules apply
Three facts sort the cases before any country is named.
- Settlor or beneficiary. Most attribution regimes attach to the settlor first. Germany's § 15 AStG attributes a foreign family trust's income to the settlor if the settlor is taxable in Germany, and otherwise to the German-resident beneficiaries; the United States and Canada build their strongest rules around the person who put the property in. A beneficiary moving alone usually meets the distribution rules; a settlor moving triggers the attribution rules.
- What the settlor kept. A revocable trust, a settlor who can benefit, a letter of wishes that is followed as an instruction — each makes the trust transparent to the settlor in almost every system. Swiss practice under Circular 30 taxes a revocable trust as the settlor's property; the British settlements code attributes a settlor-interested trust's income; the Russian test for a foreign structure turns on the same facts.
- Where the trustee sits. Italy taxes distributions from a trust in a privileged-tax jurisdiction as capital income; Portugal raises its rate from 28% to 35% where the structure sits in a listed jurisdiction; France applies its 60% rate where the trust is administered from a non-cooperative state. A move can make the trustee's jurisdiction a problem that it was not before.
Arriving: twelve destinations
The table compares twelve destinations on seven axes: whether the destination is a party to the Hague Trusts Convention of 1985, how its tax system classifies the trust, what happens when the settlor becomes resident, what happens when a beneficiary does, whether a new-resident regime shelters trust income, and which register or return opens on arrival.
| Destination | Hague 1985 | How the trust is seen | Settlor becomes resident | Beneficiary becomes resident | New-resident regime and the trust | Register or return on arrival |
|---|---|---|---|---|---|---|
| United Kingdom | Party (1992) | Settlement; relevant property for IHT | Settlor-interested income attributed; IHT once a long-term resident (10 of 20 years) | Benefits matched to trust income and gains | FIG, four years: attributed foreign income and matched benefits relieved on claim | TRS only with a UK link |
| Italy | Party (1992) | Opaque taxable person or transparent (art. 73 TUIR) | No attribution for a genuine opaque trust | From a privileged jurisdiction: payment is capital income (art. 44 g-sexies TUIR) | Article 24-bis covers qualifying foreign-source income under a valid option, with exclusions; €300,000 for civil-residence transfers from 1 January 2026; earlier cohorts keep their rate | Quadro RW where applicable; Article 24-bis monitoring exemption while the option is valid, subject to its scope |
| Spain | No | Ignored; full transparency | Assets treated as the settlor's | ISD on the settlor's death as a direct transfer | Beckham regime is an income-tax option only | RCTIR before property or business in Spain; Modelo 720 |
| France | Signed, not ratified | Fiscal definition (art. 792-0 bis CGI) | Declarations from arrival; 60% rate does not apply to a trust created before French residence | DMTG at kinship rates on transfers | — | 2181-TRUST 1 and 2; trust register (art. 1649 AB) |
| Germany | No | Foreign family foundation equivalent (§ 15 AStG) | Income attributed to the settlor | Income attributed if the settlor is not German-taxable; distributions are gifts | — | Transparency register for non-EU trustees with German business or property |
| Switzerland | Party (2007) | Circular 30 practice | Revocable: settlor's assets; irrevocable discretionary settled abroad: not attributed | Income element taxed; capital free if the settlor was non-resident at settlement | Lump-sum taxation on expenditure | Wealth-tax return for attributed assets |
| Portugal | No | Fiduciary structure defined in CIRS | No attribution | 28% on distributions; 35% from a listed jurisdiction | IFICI only for qualifying professional activity | Annex J |
| Cyprus | Party (2017) | Not a taxable person | No attribution | Taxed on attributed income | Non-dom: no SDC on dividends and interest | Express-trust register if a Cyprus link |
| UAE | No | No personal income tax | Nothing | Nothing | Not needed | Corporate-tax steps only for a vehicle in the CT net |
| United States | Signed, not ratified | Grantor or non-grantor | Transfer within 5 years before residence: deemed made on arrival (§ 679(a)(4)) | Throwback on accumulated income | — | Forms 3520 / 3520-A; FBAR, 8938 |
| Canada | Party (1993) | Deemed resident trust (s. 94 ITA) | Resident contributor: trust taxed in Canada | Deemed resident only with a connected contributor | No immigrant carve-out in s. 94; the 60-month exemption was withdrawn by the 2014 budget | T3; T1141 / T1142 |
| Israel | No | ITO trust chapter, ss. 75C–75P | Classification determines attribution; the trustee is normally assessed under s. 75F, subject to the statutory elections and exemptions | Qualifying relatives trust only: 30% on distributions of foreign income, or an irrevocable 25% annual election for foreign income allocated to Israeli beneficiaries (s. 75H1) | New-immigrant relief depends on the trust category and each eligible person's conditions and remaining exemption period | Reporting exemptions removed for qualifying individuals becoming resident from 1 January 2026; separate settlor/trustee notices |
Three patterns come out of the columns. The first is that recognition in civil law and treatment in tax law run on separate tracks. Spain, Germany and Portugal are not parties to the Convention, yet each has a precise tax rule for the trust; France has signed and never ratified, and has one of the heaviest trust tax regimes in Europe. The Hague column matters for property law and succession disputes; it tells almost nothing about what the move costs.
The second is that the settlor's arrival is the expensive event. Under § 15(1) AStG the income of a foreign family foundation, a category that § 15(4) extends to other asset pools and so to trusts, is attributed to the settlor if the settlor is subject to unlimited German tax, and only otherwise to the beneficiaries — with an escape in § 15(6) for a structure seated in the EU or EEA whose assets are legally and in fact beyond the family's control. The United States reaches back five years: under Treas. Reg. § 1.679-5 a nonresident who transfers property to a foreign trust and becomes a US person within five years is treated as transferring it again on the residency starting date, which makes the trust a grantor trust wherever it has a US beneficiary. Canada needs no look-back at all: under section 94 a non-resident trust with a resident contributor or a resident beneficiary is deemed resident, and the resident contributors and beneficiaries are jointly liable for its tax, as the CRA folio on trust residence summarises; the current definitions of section 94 contain no carve-out for recent immigrants, the sixty-month exemption having been withdrawn by the 2014 federal budget. A beneficiary alone makes the trust Canadian only where there is a connected contributor — a contributor whose contributions were not all made at a "non-resident time", that is, while non-resident and more than 60 months away from Canadian residence.
The third is that new-resident regimes treat trusts unevenly. The British FIG regime reaches into the trust: HMRC's manual confirms that foreign income attributed to a settlor under the settlements code and benefits matched with foreign income under the transfer-of-assets code are qualifying foreign income for a claimant (RFIG45300, RFIG45400), with the caveat that foreign income which arose in 2024-25 or earlier is not. Italy requires two separate checks: Circular 34/E, §§3.1–3.5 determines whether income is attributed from a transparent or interposed trust, or taxed on distribution from a foreign opaque trust in a privileged regime; Circular 17/E, Part III §§2–2.2 applies Article 24-bis only to income classified as foreign-source, within a valid option and its exclusions. A foreign trustee's address alone does not put every payment inside the flat tax. Israel's section 75G(e) and the Israel Tax Authority's Income Tax Circular 3/2016 make new-resident relief conditional: where a settlor's move brings the trust into the Israeli-resident category, all beneficiaries must be eligible new/returning residents or foreign residents. Relief follows the applicable personal exemptions and their remaining periods; an ordinary returning resident must not be treated as automatically entitled to the new immigrant's ten-year exemption. Other trust categories have their own rules, including proportionate relief for an eligible beneficiary of a relatives trust under section 75H1(g). Portugal's IFICI is not a regime for passive wealth at all: it requires a qualifying professional activity listed in Portaria 352/2024/1, and without it a distribution is taxed at 28% or 35%.
Registers and returns that open on arrival
Israel: exemption from tax is separate from exemption from reporting. Amendment 272, §§1–7 and 12–13 removes the relevant foreign-income/asset reporting exemptions for new immigrants and veteran returning residents becoming Israeli resident from 1 January 2026; it does not repeal their ten-year tax exemption. Under sections 75P1–75P2, a resident settlor's creation/contribution notice is normally due within 90 days; a trust's change of category has a separate notice deadline. An Israeli-resident trustee who is not required to file the specified annual trust return must report controlling persons and their residence within 90 days of creation, then changes by 30 April of the following year. For trusts already existing when Amendment 272 was published, its transition gives that trustee 120 days from 1 January 2026. These are different filings and should be calendared separately.
The reporting consequences of a move arrive faster than the tax ones, and they are triggered by links that families do not associate with residence. France requires the administrator of a trust to declare it when the settlor or a beneficiary is French-resident, when the trust holds French assets, or when the administrator is in France; the event return 2181-TRUST 1 is due within one month and the annual 2181-TRUST 2 by 15 June, and the data sit in the trust register under article 1649 AB CGI. Germany obliges a trustee outside the EU to register in the transparency register once it enters a business relationship with a German counterparty or commits to acquire German real estate (§ 21 GwG). Spain requires a trust not administered in the EU and not registered in another member state to declare itself to the Registro Central de Titularidades Reales before establishing business relations, carrying out occasional transactions or acquiring real estate in Spain (Real Decreto 609/2023). The United Kingdom asks a non-UK trust to join the Trust Registration Service only where it acquires UK land, has a UK trustee entering a business relationship, or becomes liable to UK tax (HMRC guidance). The general map of these registers is in UBO Registers.
Leaving: what the old country keeps
| Country left | Charge on the individual | What stays attached to the trust |
|---|---|---|
| United Kingdom | None; temporary non-residence of five years or less pulls gains back | IHT long-term-residence tail of 3 to 10 years; exit-charge exemptions disapplied on a long-term residence change (IHTA s. 65(8B)–(8C)) |
| Italy | None | Italian-situs assets and Italian-source income |
| Spain | Art. 95 bis LIRPF: shares above €4m, or €1m with a stake above 25% | ISD on Spanish-situs assets |
| France | Art. 167 bis CGI: holdings above €800,000 or 50%; deferred in the EU | The 60% rate stays with a trust created while the settlor was French-resident, wherever French DMTG still applies |
| Germany | § 6 AStG: stakes from 1%, seven instalments | § 15 attribution moves to any German-resident beneficiaries |
| Switzerland | None | — |
| United States | § 877A for covered expatriates | 30% withheld from distributions of non-grantor trusts (§ 877A(f)); § 2801 40% on US recipients |
| Canada | Deemed disposition (s. 128.1 ITA) | Canadian real estate and pension accounts |
| Israel | S. 100A ITO: deemed sale on the day before residence ends; payment may be deferred to actual disposal under s. 100A(b) | S. 75G(i) excludes that exit charge while the trust remains an Israeli-resident trust; a change of category must be tested separately under s. 75H |
Two lines in the table are about the trust itself, not the person. France's 60% rate under article 792-0 bis, II, 3 CGI attaches to a trust created after 11 May 2011 by a settlor who was French-resident at the time, so a departure does not change the rate — whether French DMTG applies at all afterwards turns on the ordinary territorial rules, that is on the residence of the settlor and the beneficiaries and on French-situs assets — and arriving in France with an older trust does not attract it. The United States reaches a covered expatriate's trust interests in two ways: an interest in a non-grantor trust is excluded from the mark-to-market charge but the trustee must withhold 30% of the taxable portion of every later distribution under § 877A(f), while an interest in a grantor trust is not excluded. The rest of the departure rules are in Exit Tax and, for the United States, in US Expatriation and Exit Tax.
Before the move: profile to action
| Profile | What the move triggers | Action before the residency date |
|---|---|---|
| Settlor moving to the United States within five years of settlement | Deemed transfer on arrival; grantor trust with US beneficiaries | Model the grantor years and the Forms 3520 / 3520-A; if not wanted, distribute or restructure before the residency starting date |
| Settlor moving to Canada | Deemed resident trust, joint liability | Decide between distribution, winding up and accepting Canadian taxation; the immigrant exemption no longer exists |
| Settlor or beneficiary moving to Germany | § 15 AStG attribution | EU/EEA structure with control genuinely removed (§ 15(6)), or distribution before arrival |
| New arrival in the United Kingdom | FIG window, then settlor-interested attribution and the IHT clock | Sequence benefits and disposals inside the four FIG years; keep pre-arrival capital identifiable; see Planning before UK residence |
| Beneficiary moving to Italy | Capital-income rule for privileged-jurisdiction trusts; the whole payment as income without accounts | Separate capital from income; establish trust classification, foreign-source treatment and the scope of any Article 24-bis option |
| Beneficiary moving to Portugal | 28% or 35% on distributions | Check the trustee's jurisdiction against the listed-jurisdiction list; capital distributions before arrival |
| Settlor moving to France | Declarations, register, 990 J on French real estate | First 2181-TRUST 1 within a month; review French real estate in the trust |
| Family moving to Spain | Trust disregarded; ISD on the settlor's death | Plan at the level of the assets and their situs; register before acquiring Spanish property |
| New immigrant to Israel | Classify the trust and each person's exemption; reporting relief changes for the 2026 arrival cohort | Map settlors and beneficiaries; calendar creation, contribution and category-change notices separately from the annual return |
A worked example
A non-UK, non-US entrepreneur settles a discretionary Jersey trust on 1 March 2022 with €12,000,000; the portfolio yields about €480,000 a year, and the settlor and his children are beneficiaries.
If the family moves to the United States on 1 January 2026, the residency starting date falls within five years of the transfer. Under § 1.679-5 the settlor is treated as transferring the trust property again on 1 January 2026, and with US beneficiaries the trust becomes a grantor trust: the €480,000 lands on his US return every year, and Forms 3520 and 3520-A follow. Had the move taken place on 1 April 2027, outside the five-year window, the trust would have remained a foreign non-grantor trust; distributions to the US family would then carry out current income, and anything accumulated would face the throwback rules on a later distribution.
If instead the settlor moves to London on 6 April 2026 after ten years abroad, he qualifies for FIG for 2026-27 to 2029-30. Claimed each year, the foreign income attributed to him as settlor — about €1,920,000 over four years — is relieved, at the price of the personal allowance and the CGT annual exempt amount in each claim year. From 2030-31 the same income is taxed on the arising basis. The inheritance-tax clock runs separately: he becomes a long-term resident after ten of the previous twenty tax years, that is from 2036-37, and from then the trust's non-UK assets are relevant property.
The same trust costs nothing on arrival in the UAE, is transparent to the Spanish tax system, and in Germany attributes its income to the settlor from the first year.
Typical mistakes
- Treating the Hague column as the tax answer. Recognition decides whether a civil court respects the trust; attribution, distributions and registers follow tax statutes written without reference to the Convention.
- Moving first and restructuring afterwards. The US five-year rule, the Canadian deemed residence and German attribution are fixed by facts on the residency starting date.
- Assuming the trustee's jurisdiction is neutral. Italy's privileged-regime rule, Portugal's listed jurisdictions and France's non-cooperative states make the trustee's location part of the beneficiary's tax rate.
- Forgetting the registers. A French declaration within a month, a Spanish RCTIR entry before buying property, a German transparency-register entry before opening a German account — each is triggered by a link rather than by tax, and penalties run independently of any tax due.
- Reading a zero-tax destination as the end of the story. The UAE and Cyprus charge nothing, but CRS reports the structure to every residence of every controlling person, and the country left keeps its tail — long-term residence for British IHT, citizenship for the United States.
Q/A
Does moving the trustee help when the family moves?
Sometimes, but it is a separate question. Several rules key on the trustee's jurisdiction — Italy's privileged-regime rule for distributions, Portugal's listed-jurisdiction rate, France's non-cooperative states, Germany's EU/EEA escape in § 15(6) — and a trustee change can take a trust inside or outside them. The settlor-attribution rules of the United States and Canada do not depend on where the trustee sits.
I settled a trust four years ago and am moving to the United States. What happens?
Under Treas. Reg. § 1.679-5 a nonresident who transfers property to a foreign trust and becomes a US person within five years is treated as transferring it again on the residency starting date. With US beneficiaries the trust becomes a grantor trust and its income is taxed to the settlor from that date. If the timing can move, a residency start after the fifth anniversary avoids the deemed transfer.
Does the UK's FIG regime cover income from my trust?
Foreign income attributed to a settlor under the settlements code, and benefits matched with foreign income under the transfer-of-assets code, are qualifying foreign income for a FIG claimant during the four years. Income that arose in 2024-25 or earlier is excluded. After the four years the arising basis applies, and the inheritance-tax position turns on long-term residence, not on FIG.
Can a beneficiary alone make a foreign trust Canadian?
Only with a connected contributor. Section 94 deems a non-resident trust resident in Canada where there is a resident contributor, or a resident beneficiary together with a connected contributor. A trust settled by a grandparent who was never connected with Canada is not deemed resident merely because a grandchild moves to Toronto.
Does Germany tax a trust if only a child moves there?
Yes, if the settlor is not taxable in Germany. § 15(1) AStG attributes the income of a foreign family foundation, which includes a trust, to the settlor if the settlor has unlimited German tax liability, and otherwise to the German-resident beneficiaries in proportion to their share. The EU/EEA escape in § 15(6) requires the assets to be legally and in fact beyond the family's control.
Does leaving France remove the 60% trust rate?
No. Article 792-0 bis, II, 3 CGI applies the 60% rate to a trust created after 11 May 2011 by a settlor who was French-resident when it was created. The rate is fixed by residence at creation, so a later departure does not change it; what can fall away is French jurisdiction itself, once neither the settlor nor the beneficiaries are French-resident and the trust holds no French assets. A settlor who arrives in France with an older trust does not attract the 60% rate.