In two recently published rulings, the German Federal Fiscal Court (Bundesfinanzhof, BFH) has commented on the gift taxability of distributions made by foreign trusts to beneficiaries in Germany (BFH, ruling dated June 25, 2021 – II R 31/19 as well as BFH, ruling dated June 25, 2021 – II R 32/19). In the almost identical BFH rulings, the court had
Intro The tax ramifications of a beneficial position in a foreign trust structure are likely to be severe, if any beneficiary establishes a residence or habitual abode in Germany. Although the notion of a trust does not exist in German civil law the German fiscal authorities have nevertheless introduced a comprehensive taxation of trust beneficiaries. Case Example US Resident H