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Published on Wednesday 20/11/2013


Since the French tax law of July 29th, 2011, a special tax applies when real estate property is held by means of a trust (Art. 990 J of the French Tax Code).

The settler, the trustee and the beneficiary are jointly liable for the tax. If they are not French tax residents, the tax is due yearly at the highest rate applicable for wealth tax (currently, 1.50%), assessed on the value of the estate and the eventual capitalized rents on the 1st January of the tax year.

This tax does not apply to charitable trusts, nor to those set up in order to manage acquired retirement pension rights, provided the trustee is located in a country which has signed a cooperation agreement for tax purposes with France.


The taxpayer is exempted from the tax if he has declared the assets for the assessment of the wealth tax.

If the taxpayer is not liable to wealth tax, he can be exempted by making declaring the goods to the French Tax Services (Art. 1649 AB of the French Tax Code). It is noteworthy that if the absence of declaration for wealth tax results from an exemption in an international tax convention, no declaration pursuant to art. 1649 AB has to be made.

Art. 1649 AB of the French Tax Code states that the trustee has to make two declarations:

-    Declaration of the setting up, the modification or the termination of the trust, as well as its terms and conditions. The declaration of the modification or termination of the trust has to be made within one month following the event triggering the declaration (Art. 344 G sexies, Ann. III of the French Tax Code). The corresponding tax return is the form N° 14805*01.   

Modification of the trust is understood as:   
. any change in the terms or way in which the trust is operated,    
. any change in the settlor, beneficiary reputed to be a settlor, beneficiary or trustee or the death of one of the aforementioned,    
. any new item put into the trust or any item taken out of the trust of goods or rights, any goods, rights or products of the trust that have been awarded or passed on,   
more generally, any modification of the rights or facts likely to affect the economy or operation of the trust concerned.

-    Declaration of the market value on the assets taxable in France on the 1st of January on the taxation year. The declaration has to be made before the 15th of June of each year (Art. 344 G septies, Ann. III of the French Tax Code). The corresponding tax return is the form N° 14807*01.

The decree of October 23rd, 2013, provides that the forms here above are now mandatory. They have to be filled in French.

If these declarations are not subscribed, the trustee is liable for a fine or amount equal to 12,5 % (prior to the law of December 6, 2013 it was 5%) of the goods folded into the trust and their capitalized income, with a minimum of 20 000 Euros (prior to the law of December 6, 2013 this amount was 10 000). The trustee, the constituent and the beneficiary reputed to be a constituent are jointly liable for the payment of the fine.


On top of the existing system the law of 6 December 2013 on tax fraud created a special organ, called the public registry of trusts designed to identify the declared trust, the name of the settler, trustee, beneficiary and to verify the date of the trust's formation. This registry is managed by the General Directorate of Public Finances and can be consulted only by authorised employees of the tax administration.  


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The interdisciplinary expertise of the Selarl Bruno Bedaride, notaire in Paris covers the following areas: corporate law, international contracts law, legal and tax advice, advice for international transmission, real estate law, family office, real estate and company finance law. We offer more particularly our services to non residents or foreign company who wish to invest, move or create a business in France.