Trusts and the Omnibus Decree: the “upfront taxation” option is extended to mortgage and cadastral taxes

Among the measures addressed by the Omnibus Decree (Legislative Decree No. 148 of 7 August 2026, in force from 12 August 2026) is also an issue that, since its legislative introduction in 2024, has given rise to significant interpretative and practical uncertainties: the exercise of the option for the “upfront taxation” of trusts.

The legal basis of Article 4-bis of the TUS

The reform of inheritance and gift taxation (Legislative Decree No. 139/2024) introduced the new Article 4-bis into the TUS (Legislative Decree No. 346/1990), specifically concerning trusts and other destination constraints. The general rule is “exit taxation”: tax is applied only when assets are transferred from the trustee to the beneficiary. However, paragraph 3 allows the settlor (or the trustee, in the case of testamentary trusts) to opt for “upfront taxation”: paying the tax already at the time the assets are transferred into the trust, applying the rates and allowances in force at that time. Due to the discretionary nature of this choice, this represents a unique feature of the Italian tax system.

The amendment: the upfront taxation option now also covers mortgage and cadastral taxes

The literal wording of the provision, which referred in the singular to “the tax”, legitimately raised the question of whether the option could extend its effects also to the other indirect taxes, namely mortgage and cadastral taxes, due where the trust assets consist of real estate.

Article 13 of the Omnibus Decree intervened, resolving the issue in the affirmative: by amending the legislative wording, the upfront taxation option now entails the advance payment not only of inheritance and gift tax, but also of mortgage and cadastral taxes whenever the assets contributed to the trust are real estate.

The unresolved issue: the pending implementing measure

The entry into force of the new Article 4-bis was accompanied by the expectation, as provided for by paragraph 4, of a measure by the Director of the Italian Revenue Agency establishing the implementing procedures for the entire regime of indirect taxation on transfers of assets into trusts, including the exercise of the upfront taxation option. However, despite almost two years having passed, this measure has still not been issued, with the result that many interested parties are unable to exercise a choice expressly permitted by law due solely to a practical obstacle. The implications extend even further: significant interpretative uncertainties remain open, including, in particular, the compatibility of exercising the upfront taxation option with the exemption regime under Article 3, paragraph 4-ter of the TUS or with the Article 24-bis regime of the TUIR. These issues, in the absence of official guidance, have attracted the attention of a large part of professional tax doctrine, which is calling for an authoritative clarification capable of providing certainty to the regulatory framework under review.

Tax & Legal Research Hub

Centro Studi e Pianificazione Fiscale

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Dott. Valerio Locatelli

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Dott. Giancarlo Marengo