Trust Law

The new Civil Code

• Trust Funds:  §§ 1448 – 1474 (changes as of January 1, 2018, see below)
• Fiduciary:  §§ 1400 – 1447 (supportive provisions)

The Registry of Trust Funds

• Act No. 304/2013 Coll., on the Public Registers of Legal and Natural
  Persons and on the Register of Trusts

The Act on Income Taxes

• The transfer of assets to the trust is not subject to income tax [§ 21(f) 1]
• The trust pays income tax as a legal person [§ 17 paragraph 1 part f)]
• The beneficiary’s share of the profits and distribution of assets of the trust is subject to personal income tax [§ 8 paragraph 1 part i) resp. § 10 paragraph 1 part m)]
• The gratuitous transfer of assets to the trust by means of a will exempts the beneficiaries (both individuals and legal entities) from income tax [§ 4a part b) resp. § 19b paragraph 2 part a)]
• The income from the trust assets is exempt from personal income tax provided that the assets have been transferred to the trust fund by direct family members or by some indirect family members (limited circumstances apply) or by a person living together in the same household with the beneficiary [§ 10 paragraph 3 part c) section 3.]
• For income tax purposes, the trust distributes the profits first and capital assets later [§ 21c paragraph 1]
• The trustees fees for managing the trust are treated as normal earnings from entrepreneurial activities, chargeable to income tax under § 7.

Information as at 20.9.2018

Beneficial Ownership Register

• Act No. 304/2013 Coll., on the Public Registers of Legal and Natural
  Persons and on the Register of Trusts, sections 118 (b) – 118 (j)