Overseas Chambers of Peter Harris

Maison de la Boucterie
Rue de la Boucterie
Saint Saviour
Jersey, JE2 7ZW

Commentary on the extension of the filing date for French annual trust declarations 2181 Trust2 to 30th September 2020

June 25th 2020

The French adminstration announced, after the 15th June of course, that:

"La date limite de dépôt de la déclaration annuelle pour les administrateurs de trusts est reportée exceptionnellement au 30 septembre 2020."

Covid-19 lives and changes rules.


Note that this declaration requires trustees without a French connection in the shape or form of a "constituant" / settlor "bénéficiaire deemed constituant" or a bénéficiare resident in France to file when they hold French situs assete whether these are chargeabke to IFI or not.

For example shares in Total, l'Oréal, LVMH issued out of a French register, and French Banking bonds are meant to be included; there is a penalty of €20.000 for non-compliance. Why? Because these are technically subject to French gift and succession duty on changes of benefical entitlement or attribution within a trust. These might also need to be declared on a 2181 Trust1 declaration as an "event", in any change of whatthe French consider to be beneficial entitlement but technically there is no annual tax (IFI)  payable on these movable assets after the repeal of ISF at the end of 2017.  The 2181 Trust1 declaration is another area entirely and needs strategic handling.

For example, English trustees of trusts of land should also take advice on whether to declare or not in the case of a French resident settlor deemed settlor or beneficiary, as the definition of a "trust" article 792-0 bis I CGI allocates the classification to  England, not to France. Ever since Re Berchtold and s.3 ToLATA 1996, which abolished the doctrine of conversion, an English trust of land is an immovable. It falls to the law of the state in question to determine  whether the trust is a trust or an immovable, and in the case of death, the 1963 Succession Duty Treaty can be applied in that sense, despite a somewhat clownish attempt by the French administration to change the law of classification  for Income Tax and CGT purses in the 2008 Treaty concerning only those taxes.

However, whilst this extension might appear only to cover the 2181Trust2, there is no indication that the 2181 Trust1 event declaration to be filed within one month of any événement defined in the CGI's annexe and extended or reduced by administrative commentary wil bensfit from any particular licence or tolérance as to timing.

Please note that assistance will still needed on the 2181 Trust2 for this year, by September as the French have yet again attempted to compile a register of French movable property held in trust by non-residents in their latest assault on privacy, without making any adjustment to the 2019 2181 Trust2 to render that accessible or in fact declarable.

Trustees will already have made their information available under the OECD's CRS declarations, so the entire farce is a complete waste of time, money and energy, and probably unlawful and unconstitutional as there is no tax (IFI) to recover on that basis.  All that under the threat of a penaty of €20.000 for non-compliance.

They could not organise a book-show in an imprimérie, be it national or purely domestic.

The annoucnement can be found here