Trust arrangements and sharing the one-billion-forint threshold – based on the draft

The taxpayer definition would extend beyond Hungarian trusts

Section 2, point 41, would include assets managed under the referenced Taxation Act trust definition and private foundations. Foreign organisations, arrangements and segregated pools could also qualify regardless of legal personality. Classification would depend on equivalent or similar purpose, assessed through objectives, operation, separation of ownership and disposal rights, and the positions of the people involved.

Point 26 would separately define private foundations and include non-public-benefit asset-management foundations. Point 1 would exclude wealth-management taxpayers from the tax-transparent association definition. These categories would therefore not be interchangeable merely because several people held interests connected with their wealth.

Residence and item-by-item valuation would determine the relevant wealth

Under Section 2, points 4 and 35, Hungarian-law establishment or effective management in Hungary could produce domestic residence. Foreign establishment would not preclude that classification. Under Section 4, domestic taxpayers’ worldwide wealth would fall within scope, while foreign taxpayers would be covered only through the listed Hungarian-connected real estate, rights and company holdings.

Section 24(1)–(2) would value taxable assets individually under their applicable rules before determining the base under Section 6. It would not start from a single package value for the arrangement. A holding within Section 12(3) would be valued under the relevant Annex 1 provisions.

Relatedness would depend on settlor connections and continuing wealth

Section 24(3) would establish relatedness where at least one settlor of each arrangement was the same person, related by family relationship, or connected under the Corporate Tax Act’s related-enterprise rules. The draft would refer externally for those relationship definitions; their unstated conditions could not be detailed from this text.

The contributed assets, replacements or returns would also need to remain within the relevant taxpayer’s wealth at year-end. Intermediary people, organisations or arrangements would not remove relatedness, which could also arise through a chain. Section 24(8) would extend “settlor” to founders, joining contributors and their foreign equivalents.

A shared threshold would not create a consolidated taxpayer

Section 24(4) would permit related wealth-management taxpayers to apply Section 6’s HUF 1 billion threshold only once collectively per reporting year. They could divide it, but their combined allocations could not exceed that amount. This would be a net-wealth threshold, distinct from Section 9’s HUF 100 billion tax-base band and the HUF 500 million valuation thresholds.

Section 24(7) would expressly preserve separate taxpayer status. Each arrangement would determine, declare and pay its own tax. Sharing the threshold would not imply a common return or aggregation into one base. Relatedness would restrict access to the threshold rather than eliminate separate taxpayers.

A mandatory sequence would replace an agreed declaration

Section 24(5) would require every related taxpayer to submit matching declarations identifying the group and allocated amounts. Submitted on the authority’s form by the proposed Section 25(1) deadline, the declaration would bind everyone for that reporting year. Flexible allocation would therefore depend on coordinated procedural conditions.

Otherwise, Section 24(6) would follow establishment order. The earliest taxpayer could use the threshold up to its Section 6 amount calculated without the threshold; later taxpayers could use only the remainder. The lower tax number would decide same-day priority. Failure would yield neither a full threshold for everyone nor equal allocation.

Representation and notification would follow the segregated arrangement

Under Section 29(2)–(3), the person authorised under governing law to represent, or otherwise manage, the wealth would exercise taxpayer rights and obligations. Multiple authorised persons would require a primary representative: any could act before notification, but the primary representative would act afterwards. Subsection (9) would require a Hungarian service agent if none had a Hungarian domicile or seat.

Section 29(4)–(6) would propose thirty-day notifications for new Hungarian formation, relocation of effective management and a foreign taxpayer’s first covered acquisition. Recurrence after cessation would require renewed notification. Registration would accompany notification without an existing tax number; otherwise that number would continue. Section 35(4) would propose transitional notification for existing arrangements.

Relationship data and separate records would support verification

Section 29(7) would require governing law and jurisdiction, effective management location, representatives, record-storage location and every settlor’s details. Specified family or related-enterprise connections to another arrangement’s settlor would require identification of that person and the relationship basis. Registration would thus connect with Section 24’s relatedness test.

Section 29(8), (10)–(11) would require separate records and notification of specified changes within thirty days. Residence or taxpayer-status cessation would also be reportable. A tax number would be deleted only if unnecessary for other tax obligations. The manager’s own tax records and those of other managed pools would therefore remain separate from this taxpayer’s documentation.

Payment and enforcement would concern segregated wealth

Under Section 29(12), tax would be paid from the wealth-management taxpayer’s assets. The authorised representative or manager would ensure that the necessary funds were available from that wealth. This procedural responsibility would not mean paying the tax from the manager’s own assets.

Section 29(13) would limit enforcement to segregated assets, including assets legally owned by the manager under governing law but belonging to that pool. The manager’s own assets outside it would be excluded. Section 29(1) would refer other procedural and enforcement matters to external statutes, without reproducing their unstated rules.

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