The legal construct of a trust is a common law arrangement having features that make it suitable for a wide range of uses. Italy lacks a specific legal framework for trusts, which limits its use in a purely Italian set of circumstances. Nevertheless, Italy ratified the Hague Convention on the Law Applicable to Trusts and on their Recognition (1985) and in so doing, introduced a degree of recognition of trusts governed by foreign law. The absence of a specific civil law framework for trusts, combined with Italy’s fragmented and evolving tax law regarding the treatment of trust structures has led to significant interpretative uncertainty both as to income tax matters for the settlor and the beneficiaries and inheritance and estate tax matters. Fabio Chiarenza, a partner in the Rome office of Gianni & Origoni, Francesca Staffieri, also a partner of Gianni & Origoni, and Alessandro Minniti, a managing associate of that firm explain all, including opaque trusts, transparent trusts, timing of the imposition of inheritance and gift tax, and the concept of fictitious interposition of trust as applied by the Italian tax authorities. Good read.