French Fear of Trusts and the Law of 29 July 2011

Synopsis: To a French judge or lawyer, a common law trust is an exotic animal unknown to the French legal landscape. Judges and lawyers struggle to recognize and understand this curious animal. With the globalization of the late twentieth century, the animal began to multiply. The French government then set out to tame and tax it. That effort culminated in the Law of 29 July 2011, which, for reasons this Article explains, dangerously impacts more than a negligible number of trusts created in the United States.

I. Introduction

No legal tool is more useful to American lawyers than the trust, be it revocable, irrevocable, inter vivos, or testamentary.¹ When asked to name the greatest achievement of English law, the renowned nineteenth century legal historian Frederick Maitland replied, “the development from century to century of the trust idea.”² However useful to the American lawyer, French judges tremble before it; French tax collectors call it disreputable, possibly criminal; French lawyers fail to understand it; and, in 2011, French legislators sought to tame it by enacting a new law to address trusts, the 2011 law.³

For the French legal mind, a trust is the creation of an evil person to be viewed with utmost suspicion. When the 2011 law was attacked for breach of privacy because it required a National Registry of Trusts that was open to public inspection, France’s constitutional court explained that the legislative intent for the law was to pry open the trust so as to avoid its use for tax evasion, money laundering, and fraud.⁴ As one French commentator wrote of the new law, the French clearly set out to destroy the use of the trust as a legal vehicle.⁵

This Article will explain why France has historically feared the trust. It also will discuss what the 2011 law attempts to do and suggest how practitioners cope with it.

II. French Fear

What we cannot readily understand, we too readily fear. The trust concept does not exist in French law, nor is there a close equivalent;⁶ nor has there been an available vocabulary by which English terms pertaining to a trust can be easily assimilated into French legal discourse.⁷ Until the 2011 law, there was no commonly acceptable way to translate terms such as settlor, grantor, trustee, or equitable title.

The thread of equity that grew out of a parallel court system in England knows no French equivalent. Professor Scott refrains from giving a concise definition of the trust but says it is the term “applied to that particular kind of fiduciary relationship which owes its origin to the separation in England of courts of law and courts of equity, and which was evolved by the English Court of Chancery from the ancient use.”⁸

While French law provides that title to real and personal property can be split between the usufruitier and nue-propriétaire,⁹ there is no equivalent to splitting title between legal and equitable owners,¹⁰ nor is there a notion of a fiduciary relationship.¹¹ Those concepts do not exist in French law. The 2011 law remedied some of the difficulty by defining what the French understand is meant by a trust and by creating a specific vocabulary.¹²

Yet on rare occasions, French courts were compelled to face the trust.¹³ One of the earliest cases was the 1906 Affaire Singer.¹⁴ The issue in Singer was whether a trust violated French public policy (ordre public).¹⁵ The court had to decide if the trust was a contract binding the settlor to give the trust assets to a specific person upon his death.¹⁶

If the court concluded that the trust was a contract irrevocably binding the settlor to give the trust assets after his death to a specified beneficiary, then in 1906—like in 2025—that contract would be considered a pacte sur succession future, and hence unenforceable.¹⁷

In Singer, the court had to decide if the trust was a pacte sur succession future and hence null and void under French law. The court ruled that as the beneficiaries were not parties to the trust instrument, which was an agreement between the settlor and the trustee, it was not a pacte sur succession future.¹⁸ The court would thus recognize the trust’s existence and not treat it as void ab initio.¹⁹ The court did not decide whether its terms could be enforced.

During the next sixty-four years, issues occasionally arose as to whether heirs could give an irrevocable power of attorney to a trustee,²⁰ or whether a trustee could sue in a French court.²¹ However, it was in 1970, in Courtois v. Ganay,²² that the Paris Court of Appeal filled the gap left by the 1906 Singer case.²³

In Courtois v. Ganay, the estate²⁴ was in France where the decedent lived and died, but the decedent owned personal property in the United States held by a trust governed by American law.²⁵ The heirs who attacked the trust argued that it was a pacte sur succession future and hence not enforceable in France.²⁶ The court rejected that argument.²⁷ The court ruled that the trust was a bilateral contract governed by the applicable law, which in this case was the law under which the trust was created.²⁸

Because the trust was created under American law and was valid under that law, the trust could be recognized even though the decedent’s “estate”²⁹ was to be distributed in France, subject to the qualification that the terms of the trust did not violate French ordre public.³⁰

In practice, this meant that the terms of the trust did not violate French rules of forced heirship. As the forced heirship rules only apply to heirs in the direct line of descent, and the heirs in Courtois were not in the direct line, they could not invoke the forced heirship rules.³¹

Historically, in French law, children in the direct line cannot be disinherited. This rule—which has been part of French ordre public since 1804³²—was modified by the French Supreme Court in 2017 to bring it into conformity with European law.³³ French law makes a convenient distinction between national ordre public and international ordre public. While a French citizen who resides in France cannot disinherit his or her children as it would constitute a violation of national ordre public and hence be void, a French person who resides abroad—or a citizen of another nationality, even if residing in France—can, pursuant to an EU Regulation, choose to apply the law of his or her residence or nationality.³⁴ If that law provides for testamentary freedom, then there will be no violation of French ordre public.³⁵

In sum, a French citizen who resides in France cannot disinherit his or her children. If the French citizen resides outside of France, or if the person—even if residing in France—is not French, then that person can disinherit his or her children. In both Singer and Courtois, the decedent’s last domicile was in France.³⁶ In both cases, the court ruled that the trust could be recognized, but the heirs could not benefit from the forced heirship rules because they were not in the direct line.³⁷ Hence, their attack on the trust failed.³⁸

Recognition of the trust and the trustee was a first step, but how to treat the assets of the trust is another. Are French gift taxes and inheritance taxes applicable? Who owns the trust assets? The trustee has legal title but subject to fiduciary duties not to use the trust assets for his or her own benefit. Do the French tax authorities tax the transfer from the settlor to the trustee, and then again from the trustee to the beneficiaries? When does the taxable event occur? How do French tax authorities know about the movement of assets into and out of a trust? What taxable events occur when the trust is terminated? How is trust income to be treated? The legislature set out to deal with those questions in the 2011 law.³⁹

No doubt because of a history longer than that of the United States, together with the fact that France is not made up of fifty different jurisdictions, France is in many ways better organized than the United States. France has a centralized system for recording birth, death, marriage and divorce statistics,⁴⁰ a centralized system for keeping track of all bank accounts,⁴¹ and a national registry of wills.⁴² However, until 2011 nothing existed for the trust. The operations of trusts were thus opaque. The 2011 law set out to shine a bright light on trusts and bring them out of obscurity.

III. The Law of 29 July 2011

The 2011 law is not an example of brilliant draftsmanship.⁴³ To understand what it requires, one must consult at least seventeen different articles of the French tax code.⁴⁴

The starting point is the first paragraph of article 792-0 bis, which defines for purposes of French law what is meant by a trust:

[A] trust is the aggregate of legal relations created between living persons or upon death by a constituent under the law of a state other than France by a person with the intent of putting property or rights under the control of an administrator for the benefit of one or more beneficiaries or to achieve a specific objective.⁴⁵

Here then, is a new vocabulary: a settlor or grantor is a “constituent” and a trustee is an “administrator,” although, as in the United States, beneficiaries are referred to as “beneficiaries.” However, the 2011 law fails to provide a new vocabulary for the various types of trusts: revocable, irrevocable, inter vivos, discretionary, and testamentary.

A. Applicability of the 2011 Law

The 2011 law came into effect on July 29, 2011.⁴⁶ It is applicable if any one of the following conditions are met:⁴⁷

1. The settlor is fiscally domiciled in France. Fiscal domicile is explained below.⁴⁸
2. One or more of the beneficiaries is fiscally domiciled in France.
3. An asset of the trust or a legal right belonging to the trust is situated in France.

B. Reporting Requirements

The next step in the mind of the French legislature was to make trusts visible.⁴⁹ The legislature accomplished this objective by stating that if the 2011 law is applicable because of the tax (fiscal) domicile of the settlor,⁵⁰ the tax domicile of any beneficiaries, or if any trust assets are located in France, then the trustee must report the following:

1. the creation of the trust;⁵¹
2. the identity of the settlor;⁵²
3. the identity of the beneficiaries;⁵³
4. the terms of the trust;⁵⁴
5. the value of the trust corpus on January 1st of each year;⁵⁵
6. any amendments to, or modifications of, the trust; and⁵⁶
7. the termination of the trust.⁵⁷

The legislature hammered home this obligation by imposing a fine of 20,000 euros if the trustee fails to report the above information.⁵⁸

Ironically, France’s highest court, the Cour de Cassation, in the Affaire Wildenstein,⁵⁹ ruled that the decedent’s heirs were under a duty—even before the 2011 law was adopted—to declare assets that were in a trust created by the decedent’s father.⁶⁰

The information that is reported will be kept in a National Registry of Trusts.⁶¹ As France already has a National Registry of Wills, this was a logical next step.⁶² The legislature conceived that the information would be open to the public.⁶³ However, in 2016, the Conseil Constitutionnel ruled that while the 2011 law was valid as a legitimate effort to make trusts transparent and prohibit their use for tax evasion and money laundering, making the information publicly available was a disproportionate invasion of privacy.⁶⁴ Thus, the Conseil Constitutionnel held that section of the law invalid.⁶⁵

C. Creation of Two New Taxes

The next step was to determine how the trust would be taxed. Once again, the legislature did not go about this in a particularly straightforward way. Essentially, they added two new taxes in addition to the tax on trust income, which has existed in the French tax code since 1950.⁶⁶ Before addressing the two new taxes, it will be helpful to understand the French concept of tax domicile.

1. Tax Domicile

Unlike American law, which bases the federal income tax on citizenship, French taxation is based on a person’s domicile.⁶⁷ The first step in analyzing a person’s tax status in France is to determine if the person’s tax domicile is in France.⁶⁸ Is the person fiscally domiciled in France? To answer that query one must turn to article 4 B of the French tax code.⁶⁹ It provides three criteria, discussed below.⁷⁰ If any one of the three is met, then that person is deemed to be fiscally domiciled in France and hence subject to French income taxes on worldwide income subject to whatever exceptions may exist in a bilateral tax treaty, should one exist.⁷¹

The first criterion is a person’s foyer, which can be roughly translated as the person’s home.⁷² Where does the person live with his or her family? While foyer is often easy to determine, there are instances when it is uncertain. A rough guide that lawyers use to advise potential French taxpayers is whether the person spent more than 183 days in France during the course of a calendar year. If so, then the French government may presume the person is fiscally domiciled in France.⁷³ The presumption can be rebutted, but the burden of proof will be on the person claiming to be domiciled elsewhere.⁷⁴

The second criterion is based on the person’s professional activity.⁷⁵ Where does the person work? If it is in France, the tax domicile is in France unless the work is incidental to the person’s principal professional activity.⁷⁶

The third criterion is to determine the center of the person’s economic interests, which is where the bulk of his or her wealth is located.⁷⁷

2. The Annual Tax

Article 990 J creates a new “Annual Tax” on the settlor—or on the beneficiaries as they are defined in article 792-0 bis—at the highest rate of tax set forth in article 885 U.⁷⁸ The highest rate set forth in that article is currently 1.5%.⁷⁹ If due, it is payable by the administrator of the trust (that is, the trustee).⁸⁰ The tax is not due if the beneficiaries are charitable, not-for-profit entities.⁸¹

When the Annual Tax was created in 2011, it was a potent tax. It was then, and still is, linked to the wealth tax.⁸² The Annual Tax is only due if the potential taxpayer is subject to the wealth tax.⁸³ To understand if one is liable for the Annual Tax, one must know if one is subject to the wealth tax.

The current version of the Wealth Tax applies only to real estate so as to direct investments into France.⁸⁴ This new, amputated Wealth Tax came into effect in 2018.⁸⁵ It is applicable to amounts above 1,300,000 euros.⁸⁶ Thus, between 2011 and 2018, if the 2011 law was applicable, the trust was subject to the Annual Tax on all of its assets.⁸⁷ Whereas, since 2018, the Annual Tax is applicable only to trust assets that consist of real estate.⁸⁸ As many trusts do not hold real estate, since 2018 the Annual Tax has ceased to be a major problem.

Two other considerations come into play in applying the Wealth Tax. First, there is a 30% exemption on a principal residence.⁸⁹ A person fiscally domiciled in France whose only real estate is a principal residence will only be subject to the Wealth Tax if the fair market value of the residence is greater than 1,850,000 euros.⁹⁰

The second consideration is the existence for Americans of a five-year treaty exemption from the Wealth Tax. The United States-French income tax treaty provides in article 23:

[F]or the purposes of taxation with respect to the wealth tax … of an individual resident of France who is a citizen of the United States and not a French national, the assets situated outside of France that such a person owns on the first of January of each of the five years following the calendar year in which he becomes a resident of France shall be excluded from the base of assessment of the above-mentioned wealth tax relating to each of those five years.⁹¹

3. The Ad Hoc Death Tax

The Ad Hoc Death Tax is a new tax created by article 792-0 bis II that presents a far more serious problem. If the assets of a trust pass to a beneficiary, either during the settlor’s lifetime or upon his death, the assets are subject to French gift and inheritance taxes.⁹² The taxable event is the death of the settlor.⁹³

The inheritance tax is due even if the trust assets are not distributed.⁹⁴ If upon the settlor’s death the beneficiary’s share of the trust assets can be determined, the rate of the tax will depend upon the relationship between the beneficiary and the settlor.⁹⁵ If the trust corpus is due globally to the settlor’s descendants without specifying the amount to be received by each beneficiary, then the tax rate will be 45%.⁹⁶

The net amount of assets that remain in the trust after distribution will be taxed at a rate of 60%.⁹⁷ The trustee has the duty to make the payment, but the beneficiaries have joint and several liability if the trustee fails to make payment.⁹⁸

Assuming that the immediate beneficiaries have received their distribution, paid the inheritance taxes, and do not benefit from the assets that remain in the trust, one may wonder if taxing the undistributed trust assets is compatible with the 2017 decision of the French Constitutional Court, which ruled that a settlor, or a beneficiary deemed to be the settlor, cannot be made subject to the wealth tax if the assets in the trust confer no direct or indirect benefit.⁹⁹ While that case involved the Wealth Tax, the guiding principle should apply equally to the 2011 law.

IV. The Existing Income Tax

The new law did not change some tax aspects that already existed. For example, article 120 of the CGI makes trust income—regardless of its nature—subject to French income taxes if the tax domicile of the beneficiary is in France.¹⁰⁰ The income must be distributed.¹⁰¹ Trust income is deemed to be investment income and is taxed at a global rate of 30%.¹⁰² The 30% is made up of income taxes of 12.8% and social charges of 17.2%.¹⁰³ These aspects of French tax law remained unchanged.

V. Conclusion

As an initial commentator on the 2011 law wrote shortly after the law appeared, “[y]ou don’t need to be a genius to understand that this law announces the gradual extinction of trusts having a territorial link with France.”¹⁰⁴ Indeed, since 2011, the author’s firm has regularly advised its clients that if they have a trust and are settling in France, or a beneficiary of the trust resides in France, they should—if possible—revoke the trust and make other plans.

Given the widespread use of revocable trusts in the United States as will substitutes, revoking those trusts can result in estate planning problems and may make probate proceedings inevitable. If the trust is irrevocable with no possibility of revocation and there is a French connection, possibly because a beneficiary resides in France, the potential French consequences upon the settlor’s death can be significant.

Because the trust is an extremely useful and legitimate tool for the management of family wealth, it is disappointing that the French legislature imposed a death penalty on it rather than simply trying to make it transparent. The French legislature’s goal of preventing the use of trusts for tax evasion and money laundering could have been achieved without slaying the irrationally feared dragon.

Ronald Sokol is admitted to the bar in Wisconsin and France, where he currently practices. He has taught at the University of Virginia; Imperial College, London; and in France and Norway. His most recent book is A Young Person’s Guide to Law and Justice (2024). Translations in the text are the author’s.

First published in the Real Property, Trust and Estate Law Journal, volume 61, Summer 2026, pages 249 to 262.

Footnotes

1. “A trust can be created for any purpose which is not illegal, which is not against public policy. The duties of the trustee are such as the creator of the trust may choose to impose; the interests of the beneficiaries are such as he may choose to confer upon them.” Austin Wakeman Scott, Abridgment of the Law of Trusts 3 (Little, Brown and Co., 1960). ↩

2. Id. ↩

3. See Code Général des Impôts [CGI] [General Tax Code] art. 792-0 bis (Fr.). ↩

4. See Conseil constitutionnel [CC] [Constitutional Court] decision No. 2016-591QPC, Oct. 21, 2016, J.O. 38 (Fr.). ↩

5. See Patrick Michaud, Régime Fiscal des Trusts en France Vers une extinction programmée du trust?, Études Fiscales Internationales (Aug. 15, 2011), https://www.etudes-fiscales-internationales.com/media/02/00/2657276083.pdf [https://perma.cc/L33N-ERHC]. Although now outdated, this source is still the best analysis in French of the 2011 law. ↩

6. See Pierre Lepaulle, Civil Law Substitutes for Trusts, 36 Yale L.J. 1126, 1127 (1927). ↩

7. See generally Common Law Trusts in Civil Law Courts, 67 Harv. L. Rev. 1030, 1030 n.3 (1954); Jaro Mayda, “Trusts” and “Living Law” in Europe, 103 U. Penn. L. Rev. 1041, 1044 (1955). ↩

8. Scott, supra note 1, at 22. ↩

9. These terms can be roughly equated to a life estate and fee simple, respectively. See Common Law Trusts in Civil Law Courts, supra note 7, at 1031 & n.7. ↩

10. The English law fiction between a life estate and fee simple only applies to real property, whereas the French fiction of the usufruit and the nue-propriété covers personal property as well as real property. See Common Law Trusts in Civil Law Courts, supra note 7, at 1031–32. Shares in a company can thus be split between the usufruitier and the nue-propriétaire. See id. “A fiction is an ‘expedient, but consciously false, assumption.’” Lon L. Fuller, Legal Fictions 7 (Stanford Univ. Press, 1967) (quoting Hans Vaihinger, Die Philosophie des Als Ob 130 [The Philosophy of ‘As Is’] (4th ed. 1920) (Ger.)). ↩

11. A fiduciary relationship involves a duty on the part of the fiduciary to act for the benefit of the other party to the relation as to matters within the scope of the relation. A fiduciary is ordinarily under a duty not to delegate to a third person the performance of his duties as fiduciary. As to matters within the scope of the relation he is under a duty not to profit at the expense of the beneficiary. Scott, supra note 1, at 24. ↩

12. See Code Général des Impôts [CGI] [General Tax Code] art. 792-0 bis (Fr.). ↩

13. Between 1855 and 1981—a period of 126 years—only 27 French cases mention the common law trust out of the millions of cases decided. See Josephe Delattre & François Tripet, Trust Inter Vivos Irrevocable et Succession Soumise à la Loi Française, Considérations Civiles et Fiscales [Irrevocable Intervivos Trusts and Succession Applied to the French Law: Civil and Fiscal Considerations], Art. 56091 Journal Notarial 521, 534 (1981) (Fr.). ↩

14. See Tribunal civil de la Seine [Civil Tribunal of the Seine], Paris, 1e ch., May 16, 1906, Revue de droit international privé 1907, 239–62 note Marcel Nast (Fr.), cited in Francis Lefebvre, Régime du Trust en Droit Français, ThemeExpress § 143 [hereinafter Singer]. The author’s copy of Régime du Trust en Droit Français dates from July 22, 2002. See id. The last citations are from the year 2000. See id. The year of publication is probably 2000. That source represents the major treatment of the trust prior to the 2011 law. ↩

15. See id. ↩

16. See id. ↩

17. See Code civil [C. civ.] [Civil Code] art. 722 (Fr.). Literally a contract to bind oneself irrevocably as to how one’s assets will be distributed after one’s death. See id. The irrevocability distinguishes it from a will. See id. Article 722 makes it unenforceable. See id. ↩

18. See Singer, supra note 14. ↩

19. See id. ↩

20. See Cass. crim., June 4, 1941, Bulletin des arrêts de la cour de cassation rendus en matière, criminel [Bull. crim.], No. 33 (Fr.). ↩

21. See Cour de cassation [Cass.] [supreme court for judicial matters] 1e civ., June 6, 1967, Revue Critique de Droit International Privé, 75 (1969) (Fr.). ↩

22. See Cour d’appel [CA] [regional court of appeal] Paris, 1e ch., Jan. 10, 1970, Revue Critique de Droit International Privé 518 (1971) (Fr.) [hereinafter Courtois]. ↩

23. See Singer, supra note 14. Although overtaken by recent developments both in French and EU law, Courtois is brilliantly explained by Douglas Woodworth. See Douglas C. Woodworth, Trusts and Estate Planning in France after Epoux Courtois and Dame B, 16 Int’l Law. 704 (Fall, 1982). ↩

24. The estate is not a legal entity in French law. French law refers to the “inheritance” or succession. The heirs inherit the assets of the decedent immediately upon death. See Courtois, supra note 22. In the French phrase, la mort saisit le vif. While that is the concept, in practice the inheritance can be drawn out, and the heirs normally do not get instantaneous possession of the decedent’s assets. ↩

25. See Courtois, supra note 22. ↩

26. See id. ↩

27. See id. ↩

28. See id. ↩

29. See Code Général des Impôts [CGI] [General Tax Code] art. 792-0 bis (Fr.). ↩

30. See Courtois, supra note 22. ↩

31. See id. ↩

32. See Code civil [C. civ.] [Civil Code] art. 913 (Fr.). The rule dates from the Napoleonic Code, which put an end to primogeniture after the French Revolution. ↩

33. See Council Regulation 650/2012, arts. 21–22, 2012 O.J. (L 201) 109; Cour de cassation [Cass.] [supreme court for judicial matters] 1e civ., Sep. 27, 2017, Bull. Civ. I, No. 16-13151 (Fr.). ↩

34. See id. ↩

35. See Cour de cassation [Cass.] [supreme court for judicial matters] 1e civ., Sep. 27, 2017, Bull. Civ. I, No. 16-13151 (Fr.). ↩

36. See Singer, supra note 14; Courtois, supra note 22. ↩

37. See Singer, supra note 14; Courtois, supra note 22. ↩

38. See Singer, supra note 14; Courtois, supra note 22. ↩

39. See Code Général des Impôts [CGI] [General Tax Code] art. 792-0 bis (Fr.). ↩

40. See Registry office data, Institut National de la Statistique et des Etudes Economiques (French National Institute of Statistics and Economic Studies), https://www.insee.fr/en/information/2493967 [https://perma.cc/3M63-75JC] (last visited June 22, 2026). ↩

41. See Bank Account File, République Française (Republic of France), https://www.service-public.gouv.fr/particuliers/vosdroits/F2233?lang=en [https://perma.cc/Z63Z-G87M] (May 22, 2026). ↩

42. Wills in France are either holographic or done by a French notaire in what is termed authenticated form. Both types are valid. If done by a notaire, the notaire will register the will with the National Will Registry. If the will is holographic, there is no requirement that it be registered, but good practice is to send the holographic will to the notaire who will register it with the National Will Registry. Consequently, when a person dies, regardless of where the death occurs, the Registry can be searched to see if there is a will. See Query the Central Register of Last Wills and Testaments (FCDDV), République Française (Republic of France), https://www.service-public.gouv.fr/particuliers/vosdroits/R32210 [https://perma.cc/HG49-RAM5] (last visited June 23, 2026). ↩

43. Very little has been published in English on the 2011 law, and not much in French. See Frederic Mege, Trusts Across the Channel, Trs. & Ests. L. & Tax J., May 2013, at 24, 24; Bruno Gouthière, Foreign Trusts: French filing obligations, Int’l Tax J., May–Jun. 2013, at 9, 39; J. Andrew P. Stone & Olivia S. Brennan, Issues Family Offices Face When a Client Marries a Noncitizen, Trs. & Ests., Aug. 2016, at 33; G. Warren Whitaker, Jean-Phillippe Mabru & Matthew J. Woodbury, French Law Affecting U.S. Citizens and Trusts, Trs. & Ests., May 2018, at 33. ↩

44. See Code Général des Impôts [CGI] [General Tax Code] arts. 4B, 120, 750ter, 777, 784, 792-0 bis, 795, 885G, 885L, 885U, 964, 965, 970, 990D, 990J, 1649AB, 1736 (Fr.). ↩

45. Translation of: “[O]n entend par trust l’ensemble des relations juridiques créées dans le droit d’un État autre que la France par une personne qui a la qualité de constituant, par acte entre vifs ou à cause de mort, en vue d’y placer des biens ou droits, sous le contrôle d’un administrateur, dans l’intérêt d’un ou de plusieurs bénéficiaires ou pour la réalisation d’un objectif déterminé.” Code Général des Impôts [CGI] [General Tax Code] art. 792-0 bis (Fr.). The definition follows quite closely to that used in the Hague Convention of July 1, 1985, on the law applicable to and in recognition of trusts. See Convention on the Law Applicable to Trusts and on their Recognition, July 1, 1985, art. 2., https://www.hcch.net/en/instruments/conventions/full-text/?cid=59 [https://perma.cc/W8HK-Q5NK]. France has not ratified the treaty. The definition might be compared to Professor Scott’s statement that “the purpose [of a trust] is to give to one or more persons the beneficial ownership of property while committing the management of the property to others, whether the trust is created by will or by a transaction inter vivos.” Scott, supra note 1, at 23. ↩

46. See Julie Gallois, Affaire Wildenstein: absence de prescription d’une fraude fiscale commise via un trust étranger [The Wildenstein Case: No Statute of Limitations for Tax Fraud Committed via a Foreign Trust], Dalloz Actualité (Feb. 5, 2021). ↩

47. See Code Général des Impôts [CGI] [General Tax Code] art. 792-0 bis, 1649 (Fr.); Bulletin Officiel des Finances Publiques-Impôts [BOFiP]: Dispositions Juridiques Communes-Dispositions relatives aux trusts [Official Bulletin of Public Finance–Taxes: Common Legal Provisions-Provisions Related to Trusts] ¶¶ 140–60 (Mar. 30, 2022). ↩

48. See infra Section III.C.1. ↩

49. See supra note 46. ↩

50. See CGI [General Tax Code] art. 4B (Fr.) (defining tax domicile). ↩

51. See CGI [General Tax Code] art. 1649AB (Fr.). ↩

52. See id. ↩

53. See id. ↩

54. See id. ↩

55. See id. ↩

56. See id. ↩

57. See id. ↩

58. See CGI [General Tax Code] art. 1736 IV bis (Fr.). ↩

59. See Cour de cassation [Cass.] [supreme court for judicial matters] crim., Jan. 6, 2021, Bull. Crim., No. 43 (Fr.). ↩

60. See Gallois, supra note 46. ↩

61. See CGI [General Tax Code] art. 1649 AB(II) (Fr.). ↩

62. Registration of a will in France is not obligatory, but as a matter of good practice it is generally done. The original of the will is given to a French notaire who registers it and retains the original. See supra, note 42 and accompanying text. ↩

63. See Conseil constitutionnel [CC] [Constitutional Court] decision No. 2016-591QPC, Oct. 21, 2016, J.O. 38 (Fr.). ↩

64. See id. ↩

65. See id. ↩

66. See CGI [General Tax Code] art. 120 (Fr.). ↩

67. See CGI [General Tax Code] art. 4 A (Fr.). ↩

68. See id. ↩

69. See CGI [General Tax Code] art. 4 B (Fr.). ↩

70. See id. ↩

71. See id. ↩

72. See id. ↩

73. See BOI-INT-DG-20-20-40, BOFiP-Impôts [Bulletin of Public Finances] (Sept. 12, 2012) (Fr.), https://bofip.impots.gouv.fr/bofip/4883-PGP.html/identifiant%3DBOI-INT-DG-20-20-40-20120912 [https://perma.cc/XN8Z-SGVE]. ↩

74. See id. ↩

75. See id. ↩

76. See id. ↩

77. See id. ↩

78. See CGI [General Tax Code] art. 990 J(I) (Fr.). ↩

79. See CGI [General Tax Code] art. 885 U (Fr.). ↩

80. See BOI-PAT-IFI-20-30-20 § 130, BOFiP-Impôts [Bulletin of Public Finances] (Mar. 30, 2022) (Fr.). ↩

81. See CGI [General Tax Code] arts. 795, 990 J(II) (Fr.). ↩

82. See CGI [General Tax Code] art. 990 J(III)(2º)(a) (Fr.). ↩

83. This clause explains that the annual tax is not due if the required reporting requirements have been met and the amounts involved are less than the amount that triggers the wealth tax: “Toutefois, le prélèvement n’est pas dû à raison des biens, droits et produits capitalisés lorsqu’ils ont été … [d]éclarés, en application de l’article 1649 AB, dans le patrimoine d’un constituant ou d’un bénéficiaire … dans les cas où le constituant ou le bénéficiaire n’est pas redevable de l’impôt de solidarité sur la fortune compte tenu de la valeur nette taxable de son patrimoine, celui-ci incluant les biens, droits et produits capitalisés placés dans le trust.” CGI [General Tax Code] art. 990 J(III)(2º)(b) (Fr.). ↩

84. See CGI [General Tax Code] art. 973 (Fr.). ↩

85. See Loi 2017-1836 du 30 décembre 2017 de financement de la sécurité sociale pour 2018 [Law 2017-1836 of December 30, 2017 on the Financing of Social Security for 2018], Journal Officiel de la République Française [J.O.] [Official Gazette of France], Dec. 31, 2017, p. 38. ↩

86. See CGI [General Tax Code] art. 885 U (Fr.). ↩

87. See Whitaker, supra note 43, at 37. ↩

88. See Loi 2017-1836 du 30 décembre 2017 de financement de la sécurité sociale pour 2018 [Law 2017-1836 of December 30, 2017 on the Financing of Social Security for 2018], Journal Officiel de la République Française [J.O.] [Official Gazette of France], Dec. 31, 2017, p. 38. ↩

89. See CGI [General Tax Code] art. 973 (Fr.). ↩

90. See Loi 2017-1836 du 30 décembre 2017 de financement de la sécurité sociale pour 2018 [Law 2017-1836 of December 30, 2017 on the Financing of Social Security for 2018], Journal Officiel de la République Française [J.O.] [Official Gazette of France], Dec. 31, 2017, p. 38. ↩

91. Convention Between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, Fr.-US., Jan. 1, 1996, Treaty Document 103-32, art. 23 § 6. ↩

92. See CGI [General Tax Code] art. 792-0 bis(II)(1) (Fr.) (showing that the French tax rates for gifts and inheritance are identical). ↩

93. See id. at (II)(1)(c). ↩

94. See id. ↩

95. See id. at (II)(2)(a). ↩

96. See id. at (II)(2)(b). ↩

97. See id. at (II)(2)(c). ↩

98. See id. ↩

99. Conseil constitutionnel [cc] [Constitutional court] decision No. 2017-679QPC, Dec. 15, 2017, J.O. 38 (Fr.). ↩

100. See CGI [General Tax Code] art. 120(9) (Fr.) (“Les produits distribués par un trust défini à l’article 792-0 bis, quelle que soit la consistance des biens ou droits placés dans le trust.”). ↩

101. See id. ↩

102. See CGI [General Tax Code] art. 792-0 bis (Fr.). ↩

103. See id. ↩

104. Michaud, supra note 5, at 8 (saying, “Il ne faut pas être grand clerc pour comprendre que ce texte annonce l’extinction programmée des trusts ayant un lien territorial avec la France.”). ↩