Dr Alon Kaplan 12 August 2024
Israel’s Immigration Continues, Supported By Tax Incentives
We carry this brief commentary by a long-standing figure in the world’s trust and estates planning industry with a view on Israel.
This news service – as seen by this example – continues to cover the ways in which people migrate to new jurisdictions, sometimes to obtain more advantageous tax regimes, work environments and political and legal stability. In the past, we have written about Israel as a place with a wealth management dimension, and not just for those of the Jewish faith. In 2020, Israel inked the important Abraham Accords with the likes of the United Arab Emirates and Bahrain, and this news service considered the implications.
Of course, it is impossible to overlook the grim events in the country of 7 October 2023, and the subsequent conflict in Gaza and the implications for the wider region. And yet Dr Alon Kaplan, author of this article, argues that Jewish people continue to emigrate to Israel. It remains an important economy in areas such as IT. The country’s tax, estate and inheritance laws have specific advantages.
Dr Kaplan, TEP, is an advocate and notary, and member of the New York and Israel bars. An experienced lawyer in areas including estates, trusts and private client work, he is a member of the Society of Trust and Estate Practitioners, aka STEP. He is founder of STEP Israel. Dr Kaplan wrote this article alongside Yakir Ben Harush, advocate. (More on Dr Kaplan’s background and published works below.)
The editors of this news service share these views to stimulate debate; the usual editorial disclaimers apply to views of guest writers. To respond, email tom.burroughes@wealthbriefing.com
Israel is a land of immigrants. Historically, it is one of the few countries that explicitly addressed the need for liberal immigration policies in its founding document. In 1950, the new Israeli government enacted the the Law of Return, which guarantees to this day that “every Jew has the right to come to this country and become an Israeli citizen.”
The state’s support for immigration is further reflected in its legislative system and government policy. The impact of massive immigration to Israel necessitated legal and economic arrangements. One of the important arrangements established by the Israeli government is providing incentives for new immigrants, returning residents, and returning long-time residents.
In 2007, on Israel’s 60th anniversary, a new law was enacted to encourage both immigration and the return of Israeli citizens who are not residents of Israel to move and live in Israel. The reform in taxation of new immigrants and returning residents (hereinafter: “New Immigrants Legislation”) replaced previous legislation that granted benefits to new immigrants and returning residents and was approved by the Ministry of Finance in 2008.
Since the enactment of the new immigrant law, attractive wealth planning arrangements motivates immigration to Israel. The Israeli legal system includes up-to-date legislation and precedents in the field of inheritance and estate planning.
Unlike other jurisdictions around the world, especially in the Western world, Israel does not impose estate tax or gift tax. Immigrants are provided a 10-year exemption period for tax in relation to income originating outside of Israel. These incentives encourage individuals to take the necessary steps and organise their financial affairs when settling in Israel.
In addition to the tax exemption, and to further encourage immigration to Israel, the Israeli legislature also granted these new immigrants and returning residents an exemption from reporting their income accrued outside of Israel.
The special incentive for immigration and investment in Israel are not to be regarded with the popular term of a “golden visa.” As explained above, the special Law of Return was enacted in 1950 with the goal of creating a state for Jewish people who wish to settle and live in Israel.
About Dr Kaplan
Dr Kaplan practises law in Tel Aviv and specialises in trusts and estates. He was admitted to the Israel Bar in 1970 and appointed notary in 1989. He was also admitted to the New York Bar in 1990, and was licensed in Germany in 1991 and became a member of the Frankfurt Bar Association in 2010. He was an adjunct lecturer at the Law Faculty of Tel Aviv University and lectured in its LLM programme. The founder of STEP Israel in 1998, Dr Kaplan is its president. He is also an academician of the International Academy of Estate and Trust Law and member of the American College of Trust and Estate Counsel. Dr Kaplan also advised the Israeli Tax Authority on trust legislation. is the general editor of Trusts in Prime Jurisdictions (5th edition, April 2019), the Israel country correspondent for Oxford Journals’ Trusts and Trustees, author of Trusts in Israel: Development and current practice (2015 Helbing Lichtenhahn Verlag) and Trusts and Estate planning in Israel (October 2016, Juris Publishing).
אלון קפלן
חוקיות פריצה למאגר מידע של עורך דין ולקוחו
- Published in Articles
Article published in the Magazine Private Banking January 2024
Dr. Alon Kaplan and Meytal Lieberman
In recent years, newspapers have published reports of “blind Trust” in connection with a mechanism designed to prevent conflicts of interest of public servant (“the official”)l, such as ministers and the prime minister. In the United States, blind trusts are regulated by the Ethics in Government Act of 1978. This law defines the conditions under which the official may hold assets, under via af blind trust, and these are: First, the trust must be held separately from the official and managed independently. Second, the trust is prohibited from including restrictions on the sale or transfer of assets. Third, the official is prohibited from receiving any information about the trust except for quarterly updates regarding its value, income and losses for the purpose of filing tax reports.
What is this “blind Trust” and what does it come to prevent?
- Published in Articles, Books, Business, Family office
נאמנות בישראל
Alon Kaplan
היא מושג (Trust) הנאמנות משפטי. הכוונה היא למרקם של יחסים משפטיים לפיהם הלקוח אשר הינו מייסד מעביר (Settlor) הנאמנות בעלות בנכסים לידי נאמן ומעניק לנאמן (Trustee) (או למספר נאמנים) זכויות לפעול בנאמנות על פי כתב נאמנות והחוק. בשונה מהמצב בשליחות פטירתו של הלקוח או של נהנה איננה מסיימת את הקשר המשפטי והנאמנות תמשיך לפעול ללא צורך בעריכת פרוצדורה של ירושה.
- Published in Articles
The Israeli Trust
Published in STEP Trust Quarterly Review Volume 17, Issue 2 2019
Dr. Alon Kaplan and Meytal Liberman
ABSTRACT
• Israel’s trust law applies to any trust relationship; however, the main route to create a private trust is by creating a hekdesh, also known as an endowment. The hekdesh is a document signed unilaterally by the settlor and can be executed either before a notary or as a last will and testament.
• Since a trust under Israeli law, including a hekdesh, is not considered a legal entity, common practice is to use an underlying company to hold the trust assets. The use of a hekdesh combined with an underlying company offers an efficient instrument for estate planning, contrary to a trust created by a contract between the settlor and the trustee.
• This article will review the trust under Israeli law, with an emphasis on the hekdesh and its use. It will also investigate the recognition of foreign trusts under Israeli law.
- Published in Articles
