Private Foundation; A practical case and ruling Supreme Council
Practical case and ruling Supreme Council
Someone one Curacao created a Private Foundation (SPF). The SPF was aimed at managing assets and distributions to family members of those who have power transferred to the SPF. The SPF had the right to make distributions of its assets to the founder or to others. The founder was not part of the management of the SPF, but could make wishes known in writing to the Board. The board was not obliged to follow those wishes. One of these requirements was that the SPF after the death of the founder would suddenly make a distribution to her only child and heir in the form of a grant under administration. The Tax Office was of the opinion that the ability of the SPF should be attributed to the founder. According to the Tax could founder possess the ability of the SPF as if it were its own funds. The tax authorities considered that the SPF had therefore to be regarded as fiscally transparent and that the SPF power was responsible for the founder.
Following Amsterdam Court of the Supreme Court also did not share the view of the tax authorities. The legal form of the SPF showed that the founder had no control over the transferred assets.
As of 2010 changed the trusts legislation (under the name separated private assets; APV). Provided that the Trust complies with the new requirements, the ability of the trust is not taxed by the founder.
Importance for practice?
As long as you make sure you have no decision power over the assets pertaining to the trust and prevents you from the other conditions of APV meets, you are more tax on the assets of the trust no tax in the Netherlands.
Source:
LJN BZ4218, Supreme 12/03372
August 2015
