Fiscal Treatment of Trusts in Italy: Between Family Asset Protection and Tax Evasion

This thesis analyzes the role of trusts in the Italian legal system, with particular attention to their tax treatment, their use as an asset management tool, and the pathological consequences associated with their unlawful use. Originally a typical institution of common law systems, the adoption of trusts in Italy required a process of adaptation based on the 1985 Hague Convention and subsequent recognition by the legislature and domestic case law. The paper is divided into several sections. First, the origins and essential elements of the institution are reconstructed, comparing common law and civil law models and analyzing the peculiarities of the parties involved. Subsequently, the focus shifts to tax regulations, with reference to the classification of trusts as opaque or transparent, tax residence, direct and indirect taxation, as well as recent regulatory innovations introduced by Legislative Decree 139/2024. A further chapter is dedicated to the forms of trusts used for asset protection and planning, with particular regard to generational transfer and the protection of vulnerable individuals. Finally, the thesis addresses the issue of the misuse of trusts in tax evasion or avoidance, money laundering, and illegal transfer of capital abroad, analyzing the most relevant court rulings. What emerges is a complex picture in which, alongside the physiological function of trusts as a tool for efficiency and protection, the risks associated with their misuse are highlighted. The paper helps to clarify how trusts, if properly structured and regulated, can be a useful means of asset management and family planning, while their misuse compromises their legitimacy, raising questions about the balance between freedom of contract, creditor protection, and combating abuse of the law.