Registration by the Central Bank
The trust administration starts with the process of the transfers the property’s title from the settlor to the new trustees. A change of ownership forms is typically recorded after the private trust deed is registered by the Central Bank of Hungary. If the trust transfers any kind of property from settlor to trustee by any means exempt from gift tax, the trustee must complete the proper exemption form.
Tax number application
The trustee will need to ascertain all trust assets, such as real estates, bank and investment accounts, shares and ownership, etc. And transfer the title of those assets into the trustee’s name as the private trustee. The trustee needs to first acquire the trust’s governmental tax identification number so that any income earned from the accounts in the name of the trust is correctly reported to the National Tax & Customs Administration of Hungary (NTCA).
The private trustee may be required to pay the beneficiaries’ debts and satisfy his or her liabilities upon the request of their creditors . Taxes can be particularly complicated because both gift and income taxes may be owed if the trust assets are distributed to the beneficiaries.
Accounting and tax
In Hungary required that the trustee keep a detailed accounting of the trust. This involves using trust funds to wind up the decedent’s affairs, overseeing all trust activity, including deposits and distributions from the trust, and reviewing the document to determine the appropriate mode of accounting. The trustee should meet with an certified accountant at the onset of the administration process to assess the extent of their accounting obligation.
The trustee should pay the corporate and local business tax on the taxable profit of the trust, collect the debts, pay the creditors and distribute the trust assets according to the trust deed. The terms of the trust document will order how and when the trust assets should be dispersed among the beneficiaries. The annual financial report of the trust should be sent to the beneficiaries, the settlor and usually the to the protector as well according to the trust deed.
The private trustee should have AML policy and have to have AML records as well. They have to identify the settlor, beneficiary and who has infulence over the trust (usually the protector) and have their ultimate beneficial owner declaration and politically exposed person declaration. The private trustee has to be registered with the AML+CTF Department of the HU Tax Office as the competent person in relation to the AML+CTF obligations.