The finance ministry ruled that farmland in a self-benefit trust was not eligible for an inheritance tax exemption.
Taiwan’s Southern District National Taxation Bureau of the Ministry of Finance stated that if the settlor of a self-benefit trust transfers agricultural land into a trust during their lifetime, the property left upon their death is the right to claim the trust’s agricultural land, not ownership of the land itself. Therefore, the exemption from inheritance tax for agricultural land does not apply.
This announcement was made on 11 November 2025.
The Bureau explained that according to Article 17 of the Estate and Gift Tax Act, agricultural land within an estate can be deducted from the total estate value for inheritance tax purposes if the heirs or beneficiaries continue to use it for agricultural purposes. In other words, the land must meet three conditions to qualify for the exemption: it must be agricultural land, used for agricultural purposes, and inherited or received by the heirs or beneficiaries.
If the settlor transfers the agricultural land into a self-benefit trust, the legal ownership of the land is registered under the trustee. The settlor’s property interest changes from “land ownership” to a “trust interest.” Upon the settlor’s death, they are no longer the owner of the trust land, so the inheritance tax exemption for agricultural land cannot be applied.
The Bureau reminds the public to pay attention to inheritance tax rules regarding agricultural land under trust to avoid losing the tax-exempt benefit.
