The French anti evasion law for 2014, once enacted, will create a Register of Trusts maintained by the French tax administration and open to public consultation.

.Anyone interested in a trust with a French connection should seek advice immediately on this point if only to inform themselves of the extent to which that interest may need declaration. Those who have used exclusion mechanisms to separate themselves from existing family trusts may also need to review their position. Those who have retired to France with a pension arrangement structured in a trust will also need to consider their position, as certain of these may require "event" declaration under the existing decrees which are currently being amended.

Overseas Chambers experience in this area, particularly in the use of French declaration methodology is available to those clients and advisors who request it.

There is still uncertainty in certain French advisers minds as to whether an Employer funded pension schemes requires "event" declaration, under article 1649AB CGI, but most privately constituted pension schemes in trust format will need to be declared, and what is worse, registered. There may be further information published on this in the form of an instruction to follow with the declarations, currently under preparation.

However, the law effectively will modify the existing "event" or "événementielle"  declarations which trustees are required to file in France, in certain significant ways, as these will be used to supply the Register with information.

Until now, a "constitution, modification"  or "extinction" of a trust has been assumed to include the move to France of a beneficiary or a settlor. That issue is now important, as the event declaration confirming this will open the individual(s) concerned up to public consultation of their interest as a settlor or a beneficiary.  The notion of a vie privée, or right to a private life has just therefore been severely curtailed.

Whether this is a barrier to the freedom of movement of persons and capital within the EU is a matter which was not raised before the Parliaments, but it may be an issue which the Constitutionality procedure may address. In Peter's view, the necessity for a person exercising freedom of movement may have an argument that this is an unwarranted fiscal barrier.

The Trust is not a concept of French property law. This may be a misguided political attempt to force other OECD members such as the United Kingdom to institute their own.

Peter sets out the changes and the politics behind this somewhat unusual mechanism in a country that does not have trusts at http://www.overseaschambers.com/media/17521/the%20french%20register%20of%20trusts%2028%2011%2013.pdf

The creeping tendency  of certain lobbyists in France and in the United Kingdom to render public what are  private property matters is now coming to the surface. The perverse effects of this under public order issues remain to be quantified. Whilst there can be no objection to filing tax returns on a confidential basis, that the contents are now made a matter of public scrutiny can only be a cause for concern.

The reaction of some to say, "well I have nothing to hide" is one thing, in relation to a tax administration;  but is the response the same if an individual's entire private wealth structure is open to public attention in a country that has no realistic understanding of it, based on politicised  antagonism founded on misunderstanding and fear?

 

Please refer to Peter for advice and further information