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Trusts in Israel: Travel Through Generations

From Bible Time to High Tech CountrySTEP Conference Hungary

Alon Kaplan Adv., LLM., TEP.

April 2014

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Travel through generations

Bible

Post 2nd Temple

Ottoman Rule -

15th-20th Century

Jews and Muslim charity

and waqf

End of Ottoman Rule Trust and Land

in Palestine

1901-1917

British Mandate

1922-1948

Israel 1948-1980

Israel 1980-2014

Sir Herbert Samuel and Winston Churchill at tree planting ceremony, on site of Hebrew University, Mount Scopus, Jerusalem, 1921 (American Colony, Jerusalem. Photo Dept.)

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Bible to 2nd Temple Period“…and you shall take a wife for my son there. And if the

woman is not willing to follow you, then you will be released

from his oath”; Genesis 5-9.

Trust:Assets:

Clothing, silver, gold, nose ring

Purpose: Get me a Wife !

AbrahamSettlor

IsaacBeneficiary

ElazarTrustee

Isaac (1000 KM) Rebecca

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Post Temple Period

The Guardian

The Shalish Developments of Jewish Law

The Guet Messenger

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Ottoman Rule in the Middle East(15th Century – early 20th Century)

The use of Waqf by Jews and Muslim

The Waqf

Charitable trusts and Private Waqf- Sharia Court

Waqf in 19th Century used by Jewish community in Jerusalem

for Private Trusts.

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“A tale of five cities...”

Jerusalem

Budapest

Basel

London

Tel Aviv

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“A tale of five cities...”Trust in the service of the Zionist movement

1. Budapest

T. Herzl was born in Budapest in 1860 and later moved to live

and work in Vienna.

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“A tale of five cities...”Trust in the service of the Zionist movement

2. Basel

1897 – Zionist Congress

Emerging of the Zionist Movement

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“A tale of five cities...”Trust in the service of the Zionist movement

3. London 1901-1907

1. Jewish Colonial Trust

The financial entity of Zionist movement

2. Keren Kayemet Leisrael 1907

British company to act as the purchasing

agent of land in Israel

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“A tale of five cities...”Trust in the service of the Zionist movement

4. Tel Aviv 1909-1922

Keren Kayemet finances purchase of first land in Tel Aviv.

Jacobus Kaan acts as trustee to purchase land for 60 settlors.

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“A tale of five cities...”Trust in the service of the Zionist movement

“Lottery of shells”

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British Mandate of Palestine1922-1948

§46 of King Order in Council 1922

The Charitable Trust Ordinance 1924

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Israel - Jerusalem1948-1980

Continued use of Article 46 application of Common Law

Law of Agency 1965

Law of Trust 1979

Law and Administration Ordinance 1980 ended the use of

Article 46 of King Order in Council

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Israel - Jerusalem1980-2014

Exchange Control Regulations - End 1998

Territorial Taxation 2003 - Until 2003

Change of tax system 2003 - Starting 1.1.2003

The committee for taxation of trusts 2003

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Trust in Israel1979-2004

Trust created by law (Liquidation of Company; Trustee in Bankruptcy)

Trust created by contract.

Testamentary Trust

The Hekdesh Trust created by a notarial Trust Deed.

Trust created by Court declaration (Court declares Trust Property)

Trust of special economic activities: Bonds, Employee incentives

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Taxation of Trusts Timeline

No estate taxes; No gift taxes

Taxation of Trusts Timeline

2003 – Worldwide taxation

Prior to December 2006 – New Immigrants

– limited benefits

December 31, 2009 - Regulations for trust

reportingArrangements Law -

January 1, 2014

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Israeli Laws Applicable to Trusts and Estates

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www.mmg-israel.com

Member, Morgan & Morgan Group

www.morimor.com www.mmg-zurich.com

www.alonkaplan-law.com

Member, International Network Morgan & Morgan Attorneys at Law

www.morimor.com

1 King David Boulevard | Tel Aviv 6954301, Israel | T + 972 3 695 4463 | F +972 3 695 5575 | info@mmg-israel.com | info@alonkaplan-law.com

Thank You.

Alon Kaplan Adv., LLM., TEP.