Denmark Tax Agency Explains Taxation of Foreign Trust Fund Distributions Before, After Grantor’s Death

The Danish Customs and Tax Administration May 11 posted online a tax board binding answer clarifying the taxation of distributions by a foreign trust to its Danish beneficiaries. The trust is managed by a three-member board, but the grantor, who isn’t subject to tax in Denmark, maintains controlling power. The beneficiaries requested clarification of the taxation of the trust distributions both before and after the grantor’s death. The board explained that: 1) the funds distributed in the grantor’s lifetime are considered a gift to the beneficiaries because the trust is a pass-through entity and its capital isn’t separated from the ...