Posted on 20 December 2012
A recent change to French law means that any property in the country owned through a trust, including homes in the Alps, must be registered with the French tax authorities by the end of 2012. In addition to that, expats in France must also declare any interest they might have in a trust, regardless of where that trust was set-up. Hefty fines, typically €10,000 or 5 per cent of the value of the trust could await those who fail to comply.
France introduced the new legislation governing wealth tax and trustees’ filing requirements at the start of the year and under it all trusts containing French assets must be registered, and residents with any involvement with a trust are required to file an annual declaration of all of that trust’s assets, the assets’ values, and the trust beneficiaries. This is in addition to any wealth tax filing obligations.
In the case of a French asset being owned by a trust but none of the trustees or beneficiaries being resident in France, only the French assets in that trust need to be reported.
The deadline for registering trusts is 31st December for this year only – going forward, the annual deadline for filing a declaration will be 15th June. Expats living in the Alps affected by the new law should speak to a French lawyer for further information. In some cases, it could mean that expats in France who previously escaped paying wealth tax now have assets worth more than the threshold of €1.3million, so are now liable for the tax.