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New reporting obligation for trustees - Decree published - 19/10/2012


New reporting obligation for trustees  - Decree published

In order to circumvent tax evasion, the French Government introduced new reporting obligations for trustees in the Finance Law of 29 July 2011 which is further detailed by a Decree finally published on 15 September 2012.  

Should a settlor or one of the beneficiaries be a French tax resident or if assets and rights held by a non-French resident are located in France, this Decree provides two types of declaration to be provided by the trustees:

  • Disclosure requirement of the trust’s terms (e.g. trust deed) at the time of the set-up, modification (change of terms or any change affecting the economy of the trust) or termination of a trust (to be completed within one month following one of these three events). For events occurred between 31 July 2011 and 12 September 2012, the declaration has to be filed by 31 December 2012 ;
  • Annual declaration of the market value of the assets, rights or income capitalized or held by the trust as of 1st January of each year. The declaration should be filed by 15 June (the first one having been postponed to 30 September 2012).

Noncompliance with the filing obligation is punishable by a fine of €10.000 or 5% of the value held by the trust, whichever is greater. There are still certain grey areas. Commentaries and guidance from the French administration would therefore be welcomed.

Consequences for the Luxembourg financial sector

Luxembourg wealth management actors (such as private banks or family offices) which act as trustees (directly or through an entity within their banking group) should identify situations which could be in scope of the French rules and consider how to address both these new requirements and their obligations under Luxembourg regulations.

For further details on the matter, please refer to the alert issued by the law firm TAJ, Deloitte correspondent in France.

If you have any queries regarding the above, please do not hesitate to contact us

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