The change in the French impôt de solidarité sur la fortune
(ISF) to the impôt sur la fortune immobilère (IFI) led to a
temporary hiatus in information flows as to movable assets held for
or by French residents in trust abroad.
Without actualy announcing this in the Parliamentary
dicussions on the projet de the loi de finances pour 2019,
the French Parliament have rectified this anomaly, from the
perspective of the new data age, and reintroduced the 2181 Trusts 2
obligation for movable assets by a sleight of hand in the loi de
finances pour 2019 followed yb a decree ublished on 13th June, 1
workiung day beofre the annual 2181 Trust 2 deadline of 15th
I am not going to address the implications in detail, saving to
say that the aim is to ensure that the trustal and fiduciary
peregrinations of French resident constituants (assimilated
settlors) and trustees remain documented. There are a number of
Life Insurance policies held in trust waiting to attract penalties
of €20.000 after CRS starts to make is presence felt. There are
ways out, but I will not go into these here.
The decree of 13th June has just been published, one working day
before the 2181 Trust2 Declaration date of Saturday 15th June.
However, as it merely retransposes the régime prior to 2018, Those
Trustees who had the foresight to file a 2181 Trust2 prior to 15th
June on the old parameters will have escaped penalties of €20.000.
One can always argue that the European Commission has just held
Spanish such penalties disproportionate, and that that may have
overridden the French Conseil Constutionnel's prior decision that
such amounts were designed to ensure that these evasive anglo-saxon
or rather Norman perversions of fiscal logic and property were
correctly declared according to cartesian, now OECD principles.
The decree reinstates the 2181 Trust 1 event declaration
(déclaration événementielle) required on the constitution, the
modification and the termination of a trust over French situs
movable assets or in the case of a French resident constituant or
beneficiary any foreign movables held in trust. A Trustee failing
to declare an event within one month will, again, be faced
with a penalty of €20.000, for which the French resident will be
Those still advocating the use of will trusts under the 650/2012
EU Succession Regulation might wish to review their position and
take tax advice on the matter. The fiscal implications of so doing
in France are now extreme.
Please note that English Trusts of Land can in fact benefit from
the status of pure immovables after the abolition of the doctrine
of conversion in 1996. These in my opinion can escape declaration
under 2181 Trust 1, and the position under the annual declaration
2181 Trust 2 can also be mitigated provided that the French
resident includes a suitable valuation in any IFI declaration to
which they may be subject.