Brits in France puzzled by inheritance trust reforms

British expatriates have been left bewildered after the French government made a tax crackdown on inheritance trusts. Thousands of UK nationals are thought to have established such trusts to protect their wealth from inheritance tax (IHT). However, France’s tax office is now clamping down on such ploys and have given trustees until 15 June to declare them.

This is the first time that France’s government has started such a tax crackdown and those who do defeat the deadline face a fee of between 0.25% - 0.5% if their wealth amounts to over £1.05 million. Anyone who fails to declare these taxes face fines up to €10,000.

However, there is bewilderment on several levels, as the majority of UK expats do not know the new rules for declaring such trusts. Even those who are aware do not know the steps for making the declaration, since no set guidelines have been revealed.

Advisers say that France’s government has allowed an extension of 31 August to carry out the declaration, but this has not yet been confirmed. A shift in power to Mr Hollande’s socialist government might be partially to blame for this delay.

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