The French Conseil Constitutionnel has confirmed that barring one blemish, again concerning as to whether and if so how the IFI (impôt sur la fortune immobilière) is to be attributed as between the usufructuary and the nu-propriétaire, the abolition of Wealth Tax and its replacement the more limited IFI or immovable property wealth tax is constitutional. Those interested in the constitutionality of tax might care to read the reasoning behind the ruling, which would be very different were such a pre-enactment procedure available within the United Kingdom…
As from yesterday, trustees with French connections holding movable assets only will no longer be required to file the annual levy return n° 2181 Trust2 , as the global levy has been abolished. It hs been retained to the extent that the trustee with a French connection will still need to file an annual return 2181 setting out the immovable rights held in trust, whether that property is in France or abroad. Care needs to be taken in particular in relation to real estate funds held as investments.
Those trustees holding immovable property through companies or other entities for French residents will need to take advice, as will anyone using the old term loan technique to reduce the value of the land held.
It is still therefore crucial to monitor settlor, deemed settlor and beneficiary movements to and from France.
Anyone needing more details on what is a fairly complex legislative amendment should contact me