Law and Numbers - News Tax

TRUST - DISCLOSURE OBLIGATIONS OF THE TRUSTEE

06.02.2012 (France)

TRUST - DISCLOSURE OBLIGATIONS OF THE TRUSTEE

very recent ruling issued by the French tax authorities on December, 23d, 2011(N° 2011/37), specified the details of the disclosure obligations by a trustee. These disclosure obligations are required when the settlor or a beneficiary of the trust is French tax resident within the meaning of Article 4 B of the French tax code, or when at least one asset or right of the trust is located in France.


The trustee must report the set up, the modification or the termination of the trust and disclose the trust deed (Article 1649AB 1 of the French tax code). He must also report existing trusts as of July 31st, 2011. However, for trusts whose assets are exclusively financial assets invested in France and whose grantor and beneficiary(ies) are not French tax residents, the trustee is required to disclose the trust only when the financial assets are in the trust when it is set up or is modified, or also when the settlor or a beneficiary of the trust becomes a French tax resident.

The trustee is also required to file an annual inventory of the trust's assets valued at their fair market value as of January 1st of the year (Article 1649AB paragraph 2 of the French tax code). All the assets of the trust must be reported when the settlor or a beneficiary is resident in France. However, when the settlor and the beneficiaries are non French tax residents, only the assets located in France must be reported, including those exempted from wealth tax, financial investments excluded.