Tax issue on UK house in Trust

[Lottylala]

We have a house in the UK which is in trust to my husband.  We rent it out (all legally under the trust) and any income we receive is declared in UK and France.  My main question is should the Trustee's be declaring anything to the French government?  I just read an article that was posted on this site at the beginning of the year about buying property here and putting it in trust to try and avoid tax's.  The house has been in trust to my husband for over 20 years and we have been here for 5 years so I am wondering if this would fall under the category of trustee's having to declare here as well or they risk huge fines.

[parsnips]

[quote user="Lottylala"]We have a house in the UK which is in trust to my husband.  We rent it out (all legally under the trust) and any income we receive is declared in UK and France.  My main question is should the Trustee's be declaring anything to the French government?  I just read an article that was posted on this site at the beginning of the year about buying property here and putting it in trust to try and avoid tax's.  The house has been in trust to my husband for over 20 years and we have been here for 5 years so I am wondering if this would fall under the category of trustee's having to declare here as well or they risk huge fines.

[/quote]

Hi,

       This is really one for the professionals as there have been recent changes in the french treatment of trusts ; my (totally unexpert ) feeling is that as the trust is in the UK ,on a UK immoveable asset, the trustees should not have any declaration requirements in France , but with this government , who knows?

       Contact someone like Kentingtons at .......  www.kentingtons.com

[Mikep]

This is a real minefield. The French tax authorities have only started to chase Trusts in the last few years, and still do not really understand them. According to French tax law, all Trustees must make annual returns (and payments) for any trust with a french-resident settlor or beneficiary, even a potential beneficiary. The tax due may not be any more than you're paying now, but the paperwork looks like being a nightmare. The Trustees don't necessarily want to comply with this, since they are not French resident.

I found the free Tax Bulletins on BDO's Guernsey site useful, although very heavy going:

http://www.bdo.gg/Services/frenchtax/frenchtxna/Pages/default.aspx

I eventually paid them for advice, which I felt was expensive but necessary. In the end we moved out of France so the potential problem disappeared.