Trustees may have been taken by surprise by the change in the
loi de finances pour 2019 wrought by article 14 which requires them
to declare not only direct ot indirectholdings, in French immovable
property, but also movable assets situated in France such as shares
traded on a French stock exhange. Thas is only the asset side of
the picture.
Trustees of trusts enjoying a French connection through a
settlor or constituant and beneficiaries resident in France will
also have to declare the assets held in trust for the
settlor/constituant and the beneficial class where any one of these
is French resident, whether these assets or other individuals are
in France or not.
The avowed aim is to safeguard French succession and gift duty
upon French situs movable and immovable assets, with declared
values. That in itself is aggressive, but not objectionable.
The French administration are on an information gathering
exercise as to trusts. There is no immediate tax collection
involved saving to the extent of a prélèvement on any immovables
undeclared by the French resident taxpayer concerned or by the
Trustees where there is no other French connection. What it does is
to provide the French amdinstration with a reglularly updated
invenytopry of assest for deemed succession and gift duty
purposes.
It does howver place Trustees purchasing French shares for
investment purposes in a difficult position on their acquisition.
There is a technicla duty to declare such acquisitions and their
disposals on a 2181 Trust1 event declaration, in additon to the
annual 2181 Trust2 declaration. Given the aim is iot consolidate
gift and succession duty, that is likely to be enforced at some
point, by pênalities of €20.000.
That was the basis of the amendment to article 1649AB CGI in
January of this year. see the News page on
However, as the announcement was muffled and deliberately so,
few outside Paris were aware of it, and it was only in early June
that the declaration itself became avaioable on the French Impôts
website.
The declaration date has exceptionally been pushed back to 1st
July, 2019 by a notice of 14th June, which is clearly inadequate:
see https://www.impots.gouv.fr/portail/international-professionnel/questions/quelle-date-doit-etre-deposee-une-declaration-de-trust.
Please contact Peter today, Friday 28th June, or at the latest
by 9.000 on Monday 1st if you wish assistance in avoinding the
€20.000 which is both disproportionate and possibly
unconstitutional.