US expats in France: Navigating trust reporting obligations
US expats living in France must comply with their trust reporting obligations. Failure to do so can result in severe penalties. The Ecovis experts know what to do to ensure legally compliant implementation of these requirements.
Unlike most common law countries (USA, UK, Canada in particular), French law does not recognise the existence of trusts. The assets held in such trusts and the income they generate may be seen as being held and received directly by the trust beneficiaries.
US citizens in particular living in France need to be aware of their ongoing tax obligations. One of the most important yet often overlooked areas involves US reporting requirements for trusts, in which a US citizen is involved, either as a beneficiary, trustee, or through foreign assets (please note that this obligation is also triggered when one of the assets placed in trust is located in France).
Which declarations must be made
There are two specific declarations to be made: a declaration of the market value of the items placed in trust and an eventual declaration, for example if there is a change affecting the trustees or beneficiaries of the trust, or if any changes are made to the trust deeds. The triggering event for this obligation is assessed on 1 January of a given year, and the deadline is generally in June of the same year.
The Ecovis experts recommend that affected US expats should definitely consult a tax attorney specialising in cross-border matters. This is the only way to ensure that the complex obligations are fulfilled, especially with regard to foreign trusts, in a tax-efficient manner.
If you need advice on trust reporting or other tax matters, please contact us.Nicolas Savoy, Lawyer, ECOVIS CF Société d’Avocats, Paris, France
