Overseas Chambers of Peter Harris

Overseas Chambers
c/o Addington Chambers
160, Fleet Street,
London EC4A 2DQ,
United Kingdom
https://addingtonchambers.com

Fellow of the European Law Institute Vienna
https://overseaschambers.com/
Barrister at Law - Regulated by
the Bar Standards Board
Bar Mututal insurance: 8015/009

Compliance defaults coming to light in French 2012 Trust declarations

February 25th 2014

There seems to have been a slight misunderstanding by certain advisors as to the full declarative obligations falling on Trustees under the new French trusts legislation, as at 31st July, 2011.

Certain trustees appear to have been advised that they did not have to declare trusts settled prior to 31st July 2011 on an initial événementielle declaration, contrary to Art. 344 G sexies of the decree n° 2012-1050 of 14th September 2012.

That should have been followed up with a declaration of intervening changes, for example, in the beneficial class between July 2011 and September 2012, including exclusions. However that is not the point here. Such trustees who then filed the 2012 levy declaration, may have as yet not been notified of an omission: technically there is an admission of non-compliance as to the event even though most of the event declaration details are on the levy declaration.

Given the registration details of the French Register of trusts coming into force, the position of any trustee with a declared or as yet undeclared French connection needs review.

The administration made it very clear in its instruction BOI-PAT-ISF-30-20-30-20121016 that trusts existing prior to 31st July, 2011 had to be declared.

§310

L'administrateur du trust doit déposer une déclaration événementielle dans les cas suivants :

- pour les trusts existants à la date du 31 juillet 2011, une déclaration d'existence précisant leurs termes. Cette déclaration précise notamment le contenu de l'acte de trust et, le cas échéant, des éventuelles stipulations complémentaires régissant le fonctionnement du trust. Pour les trusts existants à la date du 31 juillet 2011, le lieu de résidence fiscale du constituant ou du bénéficiaire réputé constituant et des bénéficiaires est apprécié au 31 juillet 2011 ;

- pour les trusts dont la constitution intervient à compter du 31 juillet 2011, une déclaration précisant notamment leurs termes ;

- pour l'ensemble des trusts concernés par l'obligation déclarative, une déclaration des modifications ou extinctions intervenant à compter du 31 juillet 2011, précisant notamment les termes du trust.

Trustees needing assistance here in making a rectifying declaration to avoid the €10.000 or 5% penalty (now 20,000€) in force then should contact Peter for assistance. Also note that these penalties were increased to €20.000 or 12.5% in December, 2013 and corrected as unconstitutoinal to 20.000€ after a Con,stitutional Court decision.