The trust tax charge only applies if the taxable parties (settlor or beneficiaries) have omitted the trust assets for wealth tax, if applicable. Unfortunately, the absence of exposure to wealth tax by these parties does not preclude the trustees’ reporting obligation.
The trustees concerned with the new measures are those acting for settlements which include French resident settlors and/or beneficiaries as well as those holding French assets. In the latter case, this applies even if the settlor or beneficiaries reside outside of France.
The French authorities are expected to release new trustees’ French tax reporting forms. Given the confirmed filing deadline we expect an early release of the new forms.
It is understood that the tax reporting will request information on the trust assets held and their net value as at 1 January 2012 as well as details of the trust parties.
A failure to report is supposed to trigger a penalty of the higher of €10,000 or 5% of the trust assets. In practice, it seems difficult to envisage how the authorities will enforce this other than through the French resident taxable parties (settlor or beneficiaries) who are, according to the law, jointly and severally liable.
When the law came into force last July, the authorities did specify that they would release a décrêt d’application offering greater guidelines on what and how to report. This is still due.
Next year, the filing deadline should be 15 th June which is also the general filing deadline for wealth tax purposes (there are also deadlines of 31 st May or 15 th July, depending on residence and taxable asset values).
We are expecting further information on the actual tax forms and hopefully a décrêt. Meanwhile, for further information on the new measures please do not hesitate to request our back issue of relevant bulletins and notices by emailing your request to our French tax team at firstname.lastname@example.org.
Meanwhile, we are still waiting for the actual tax forms and further details on the reporting process itself.
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Use the link below to find out more or to purchase the book from Amazon:
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This document has been prepared as a general guide. It is not a substitute for professional advice. Neither PKF (Channel Islands) Limited nor its directors or employees accept any responsibility for loss or damage incurred as a result of acting or refraining to act upon anything contained in or omitted from this document. PKF (Channel Islands) Limited is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
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The French tax administration have confirmed in a recent instruction - reference 13K-5-12 - that the 2012 filing deadline for the 2012 trustee French tax reporting is postponed to...