The French Connection

/ 5 May 2013

Terry Jordan

We are sure that most of our readers are far too young to remember the Academy Award-winning film from 1971, but you should be aware that the French authorities have imposed a reporting requirement on trustees of trusts with a French connection.

If any of the settlor, one or more beneficiaries, or trust assets are resident or situated in France the new rules apply and the penalty for failure to comply is euro 10,000 or 5% of the trust funds.  This is a joint liability between the trustees, the settlor and the beneficiaries.

There are two reporting obligations:

  • A one off disclosure of information on the setting up, modification and termination of the trust and the terms and conditions of the trust; and
  • An annual disclosure of the market value as at 1 January of all the assets rights and products capitalised or held within the trust.

The reporting deadline is 15 June each year.

A special tax charge of 1.5% (corresponding to the upper rate of French wealth tax) arises each year on the value of the assets in the trust at 1 January unless an exemption applies.

While he cannot advise you on French taxation, Terry “Popeye” Jordan stands ready to point you in the right direction.

Terry Jordan

Senior Adviser, Private Client

T +44 (0)20 8922 9360
E terry.jordan@bkl.co.uk

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