French taxation of US trusts

The French Cour de cassation held in a case "Cts d'Elbée" of March 31st, 2009 that an invested portfolio managed and held through a trust located in the United Stated is subject to French wealth tax when the settlor and beneficiary of that revocable trust is a resident of France.

The Court confirmed the French tax authorities' position by concluding that the assets transferred into the trust had not left the settlor's personal ownership and remained therefore taxable in the hands of the settlor.

In this case, the American citizen died in France in 1999 and the French tax authorities notified the heirs in 2001 that wealth returns should have been filed and tax paid for the years from 1992 through 1999.