In a statement issued yesterday, the Malta Association of Retirement Scheme Practitioners (MARSP) said it was necessary, for now at least, for such companies to file a “2181 TRUST 2” return to the French Tax Authorities in order to comply with a new French law.
Even though the new law, which creates an obligation for trustees to disclose information “in respect of the market value” of the assets of any trust which has beneficiaries who are tax-resident in France, does “not specifically include or exclude” non-employer sponsored pension schemes, MARSP noted, Maltese trustees administering pension schemes should nevertheless file the 2181 TRUST 2 forms, pending official clarification of the matter.
Months of confusion
As reported here earlier this month, the new Loi de Finances Rectificative pour 2011 has been causing significant confusion for months for financial advisers and pension fund administrators with clients living in France who have non-employer sponsored pension schemes and similar types of trust-like structures.
The confusion for pension trustees and advisers arises from the text of the law, which can be read as granting an exemption from the reporting requirements to employer-sponsored pension schemes – but, say pension experts and advisers – makes no mention of personal pension plans.
Thus far, the French authorities have been surprisingly slow to issue any kind of clarification on the matter, many of those who have been seeking such clarification say. Efforts to obtain answers by this publication have also been unsuccessful.
‘French FATCA for trusts’
The Loi de Finances Rectificative pour 2011, which took effect on 31 July 2011, introduced a range of measures that oblige trustees to report on the trust’s French assets, their French beneficiaries, and/or any French settlors.
It has been described as a French “FATCA for trusts”, because it aims to collect information for the purposes of ensuring the payment of taxes.
Under this new law, all trustees of foreign trusts whose beneficiaries (or the “beneficiary deemed settlor”, in cases in which the original settlor has died) must meet the 17 June deadline to declare the market value of the assets, rights or capitalised income of all trusts that were in existence as of 1 Jan 2013.
The deadline in situations in which the settlor or the beneficiary is a non-French tax resident, but the trust includes assets situated in France, is 2 Sept.
Implications for 401Ks, IRAs
Advisers with clients living in France who have British personal pensions are not the only ones asking questions, meanwhile. Some experts believe that if no clarification is forthcoming from le Fisc, the new trust law could also end up applying to American personal pensions, such as 401Ks and IRAs.
