QROPS in France
The new CRS requirements led me to wonder how this could affect those with a QROPS in France or those who live in France and are considering a QROPS. For me, in the past, this has been a grey area and I have welcomed comment from tax specialists that understand how the French tax authorities treat QROPS in France.
Often referred to as the “French mini FATCA (Foreign Account Tax Compliance Act) for trusts”, the French rules require trustees of trusts to file specific tax reporting forms in France if the trusts they administer have a French nexus. A French nexus:
- the Settlor, or one of the Beneficiaries of the trust, or the trustee itself, has tax residency in France, or
- assets or rights held by the trust are in France.
Most of the UK pension transfers for those with QROPS in France will most likely be in Guernsey, Malta or Gibraltar and these will be identified as trusts in France.
QROPS in France and Trusts
Following numerous requests for clarification the French Tax Administration released an update on 28th January 2015 related to the French trust reporting rules; all French residents are expected to report if they are beneficiaries to a trust from 2013. But does this affect pensions?
The rules state “ Trustees of trusts related to pensions for the purpose of the French trust reporting rules are, subject to conditions, exempt from reporting obligations. The law defines qualifying pension trusts as trusts set up in view of managing retirement rights obtained, as a result of their professional activities, by the beneficiaries of a pension plan set up by a company or group of companies.“
For those with QROPS in France and UK pensions, the comment “.. set up by a company or group of companies“ would suggest only corporate pensions would be exempt.
However, the French Tax Administration indicated that individual retirement plans, such as the UK “Self-Invested Personal Pensions” (SIPPs) could qualify for the exemption, even if they are not set up via a company but directly by an employee or the self-employed.
Do “Assurance Vie” or tax products work within the trust?
No, as they are in the name of the trust rather than the individual offering no tax benefits or protection to the individual therefore (This is often mis-sold we find. Usually as the advisers only have a licence to sell insurance products)
QROPS in France
One could assume ( but we all know the phrase- “assume and you make an ass of me!” ) that the exemption would cover QROPS for those in France- and it may well do.
However, would it not be better to liaise with a French tax adviser for an professional (and insured) opinion before a resident in France moves their UK pension to a QROPS?
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
This article was published on 12th April 2017
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