This will be the only year that the deadline for filing such information for those trusts that have French tax-resident settlers will not be 15 June, the lawyer, Frederic Mege, who is head of French tax at Lawrence Graham LLP, adds.
Mege said he was told of the two-and-a-half month extension by a tax official in Paris, with whom he spoke earlier this week.
Such a postponement, he says, would come as welcome news to many professionals and clients in France and elsewhere, who have been increasingly concerned at the lack of guidance being provided to them by the French tax authorities, even as what has been understood to be the date for declaring an interest in trusts – 15 June – approached.
“This does not change the relevant date for the filing requirements, which remains 31 July 2011,” Mege says, noting that a key tax ruling issued on 23 December detailed how the authorities are requiring information on all trusts with French connections that existed as of 31 July 2011, and not, as expected, as of 1 Jan 2012 – as well as information concerning any modifications and terminations of trusts made since 31 July 2011.
“Therefore, any ‘planning’ implemented since 31 July 2011 and before 31 Dec 2012, with a view to escaping the filing requirements, will have no effect on the obligation to disclose the existence of the trust this year,” he says.
In respect of trusts with non-French tax resident settlors, Mege said the deadline for filing information will also be 31 August this year, as well as in future years.
Among the reasons for the delay in issuing the necessary filing guidance is said to be the recent French election, which saw President Nicolas Sarkozy replaced by Francois Hollande, and a change of Government.
As reported, the new Loi de Finances Rectificative pour 2011 contains measures that oblige trusts and their trustees to report on any French assets they held, 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.