The French Tax Administration have released an update in relation to the French trust reporting regime (commonly known as “French mini FATCA”).

This regime requires trustees to file specific tax reporting forms annually and following certain events where a trust has a French nexus.

The update was released in response to a request for clarification issued by the Federation Bancaire Francaise (FBF) and we attach an alert prepared by our French colleagues which summarises the update and the issues that need to be considered.

Please click here to view the Ernst & Young alert – http://bit.ly/1ElkCsv

The update seeks to clarify certain matters in relation to the scope of the regime and the extent to which reporting is required. In particular, the update clarifies the following points:

1. Trustees must identify all beneficiaries of a trust, irrespective of residence, for the purposes of event-based reporting as well as annual reporting;
2. Personal pensions may qualify for the pensions exemption provided the pension is recognised by local regulators. This may therefore include QROPS or US Individual Retirement Accounts;
3. The list of structures identified by the French Tax Authorities as being UCITS type structures, meaning they are outside the scope of the reporting regime, is not an exhaustive list.  Unit Trust structures which share characteristics with UCITS (as defined under EC Directive 2009/65/CE) may also be outside the scope of the reporting regime, but these need to be assessed on a case by case basis.

There is still significant uncertainty over many aspects of the French trust reporting regime and representations will continue to be made in order to obtain further clarity.

In the meantime, trustees should continue to be aware of this legislation and ensure the necessary filings are made to avoid the punitive penalties.