Although there have been reports that the deadline is expected to be postponed until 31 August, thus far nothing official has been issued, either in the way of a deadline extension or in the form of guidance as to what information is required to be disclosed, or how, these tax experts added.
At least one, Monaco-based Frederic Mege, who is head of French tax at Lawrence Graham LLP, said he was hoping for clarification at some point today on the French tax authorities’ website.
What he described as a state of "panic" in some parts is somewhat misplaced, Mege added Although the new law "does provide a deadline regarding the filing obligations applicable to the trustees," it refers to a "decree" which is to set out how, where, "and more importantly, when disclosure will have to be made"," he explained.
"Since this decree has not been issued, we do not have the deadline, and [thus] it is wrong to believe that the deadline is today," he added.
"However, French tax residents settlors or deemed settlors must file a wealth tax return disclosing the assets held in trust before midnight today, if the total value of their assets, including the assets in trust, exceeds the relevant threshold.
"This 15 June deadline concerns French tax resident settlors or deemed settlors and not trustees".
Question on SIPPs, QROPS
Graham Keysell, who looks after expatriate British clients in Brittany and Paris, said he also had not received clarification from the tax authorities "as to what trusts are to be included” by the new tax – for example, whether SIPPs and QROPS are going to have to be declared.
“Worse still," Keysell added, “the vast majority of people affected are totally unaware of their obligation to declare the value of trusts”, even though the government’s wealth tax forms actually do make mention of the change in legislation, which was brought in last year in the so-called Loi de Finances Rectificative pour 2011.
“The only good news is that people who aren’t liable to [the new French] wealth tax appear to have a breathing space in which to give the information to their local tax office,” Keysell said.
“[It is] probably the 31st of August, although this has not been officially announced.
“The bad news is that there will almost certainly be people who will now fall within the ambit of [the] wealth tax, and they definitely should have declared the details of [any] trust [in which they have an interest], and its value as of the 1st January 2012, by this evening’s deadline.”
‘No cause for panic’
Richard Bayle, the France-based country manager of the deVere Group, said that he did not see any reason for a state of panic over the new French tax on trusts, which, he noted, had been foreseen.
What is more, he added, those living in France were always better off making a will and otherwise avoiding trusts, since “the French system has never accepted trusts as legitimate”.
Contrary to what some British publications have suggested, Bayle went on, the new tax is not designed to “catch British people with trusts”.
Rather, “it is intended to stop French nationals and French tax residents from establishing offshore trusts.
However, he added, any Britons who live in France and who are named in a trust should report it to their local French tax office, as not to do so would be illegal.
Bayle said that he understands ordinary life insurance policies and individual pension funds are not included under the new French law, “whether they remain in the UK or have been transferred to another jurisdiction”.
As reported, the Loi de Finances Rectificative contained measures that oblige trusts and their trustees to report on any French assets they hold, as well as on any French beneficiaries, and/or any French settlors.
Reporting is also required even if all the parties to the trust reside outside of France, or if the trust holds a French “situs” asset, including, in particular, real estate and shares in a real estate company – such as a foreign company that owns French real estate – and French financial assets.
