A new French law, which requires pension fund trustees to report to France’s tax authority on UK personal pensions that have French tax-resident beneficiaries, is, reportedly, creating confusion among financial advisers and pension fund administrators.
The Loi de Finances Rectificative pour 2011, which took effect on 31 July 2011, introduced a range of measures that oblige trustees to report on the trust’s French assets, their French beneficiaries, and/or any French settlors. Aiming to collect information for ensuring the payment of taxes, it has been described as a French "FATCA for trusts".
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According to advisers and trustees, with clients living in France who have UK personal pensions, matters regarding the new French tax have not been clarified by the French authorities, reported International Adviser.
All trustees of foreign trusts and beneficiaries have until 17 June 2013 to declare the market value of the assets, rights or capitalised income of all trusts that were in existence as of 1 January 2013, under the new law. In situations where the settlor or the beneficiary is a non-French tax resident, but the trust includes assets situated in France, the deadline is 2 September 2013.
Reportedly, one of the problems advisers and tax experts have with the new law is that trusts are an Anglo-Saxon, common law concept, and thus unfamiliar to the French way of legal thinking, which is based on civil law.
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