ARGENTINA Law and Practice Contributed by: Juan McEwan and Agustín Lacoste, McEWAN
4.3 Transfer of Partial Interest As mentioned in 4.2 Succession Planning , it is com - mon for the founder of family-owned companies to gift their shares/interest to their heirs, reserving the eco - nomic rights (and sometimes political rights) for them - selves until their death ( usufructo vitalicio ). Unless the company is located within PBA, the transfer during the founder’s lifetime is not subject to any transfer tax (the same applies to transfer at death), so there is no need for a transfer of partial interest. For income tax purposes, transferees must include the interest received at the same value as for the transferor (Sec - tion 4 of the ITL). Argentine law provides legal remedies for a forced heir to make a claim if the forced share that should be allocated to them has been adversely affected. In this sense, the affected party could file a collatio bonorum claim regarding the trust fund. Case Involving Collatio Bonorum This interpretation was extended by the courts in a unique and unprecedented case in Argentina, in which the collatio bonorum was discussed in the matter of a trust created under the laws of the UK. In this case, the two daughters from the first marriage of the dece - dent and the surviving divorced spouse filed a com - plaint against the other heirs – the children from a third marriage of the decedent – with regard to the colla - tio bonorum of the real estate located in London and received by them as beneficiaries of a trust created in the UK by their deceased father. In respect of the col - latio bonorum, the court resolved that a trust created with a view to gratuitously benefiting a forced heir of the settlor might be deemed a gift to the heirs made before the death of the decedent and thus goes into the accounting of the estate, as its content and sig - nificance exceed that permitted under inheritance law. As regards matters of private international law, the court established that – even though the trust was governed by UK law – the succession was subject to Argentine law because that was the last address of the decedent. As a general principle in succession 5. Wealth Disputes 5.1 Trends Driving Disputes
matters, the Argentine legal system provides that suc - cession proceedings will be governed by the laws of the country in which the decedent’s address is located (as seen in this case, where the law of the decedent’s address prevailed over the law governing the trust). Sham Trust Furthermore, if the settlor received funds from the trust, then any party with a legitimate interest could pursue a sham trust claim for the irrevocable trust to be declared void ab initio. Therefore, those assets would be treated as if they had never left the settlor’s estate. A sham trust is the term used to refer to a trust that was set up with intentions other than those expressed in the deed and where the trustees had no intention of acting on the terms of the trust. 5.2 Mechanism for Compensation As a general principle in succession matters, the Argentine legal system provides that succession pro - ceedings will be governed by the laws of the country in which the decedent was domiciled at the time of their death. If a settlor dies and their last domicile is in Argentina, the CCCN’s forced heirship rules would apply. There - fore, if the trust was created with a view to gratuitously benefiting some of the forced heirs of the settlor (to the detriment of the others), it would be considered a gift to those heirs (made before the death of the decedent) and would therefore go into the accounting of the estate, as its contents and significance exceed that permitted under inheritance law. As seen in 5.1 Trends Driving Disputes , the remaining forced heirs (aggrieved parties) should file a collatio bonorum claim against the trust fund to compensate the other forced heirs of the estate. 6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries The use of corporate professional fiduciaries/trustees is prevalent when planning through foreign irrevoca - ble discretionary trusts. When planning through local fideicomisos , it is common to use either an individual trustee or a company owned by the fiduciante (not a
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