Attribution to Settlor
When an Israeli resident creates a trust, the trust's income is attributed to the settlor and taxed at the settlor's personal rates. This applies regardless of who the beneficiaries are and whether income is actually distributed. After the settlor's death, income is attributed to the beneficiaries.
Revocable vs. Irrevocable
Both revocable and irrevocable trusts created by Israeli residents are subject to settlor attribution. The distinction matters primarily for control and asset protection purposes, not for tax purposes during the settlor's lifetime.
Important Note: The information on this website is for general informational purposes only and does not constitute professional tax advice. Consult a qualified tax advisor before making financial decisions.