The trust, niche of billionaires

Everything is good for grabbing a few million euros on the back of the taxman, as the Bettencourt affair shows us. But in the catalog of tricks and whirlwinds (tax havens, offshore investments, foundations …) we did not mention the fashionable martingale: the trust.

The trust is neither a natural person nor a company or anything. It is an entity, an abstract reality. An act by which a person entrusts his property to another person, so that this latter manages them for the benefit of a third person, before handing them over to a fourth person – the one who, at the expiration of the trust, pockets the stake. All this under the possible control of a fifth thief called the “protector”.

I know I know, we don’t understand anything. But it’s on purpose. Especially since it can get even more complicated when there is a meeting of several candidate trustees.

What an advantage, you tell me. Well, the main advantage is that property put in trust no longer appears in the patrimony of its owner. Since legally, he disposed of it for the benefit of the trust – until the day when he or she or his heirs will recover it.

A good thing about the trust, no!

You can imagine that the tax authorities have long been interested in this little gem of Anglo-Saxon law. But she more or less broke her teeth. Thus, the Tribunal de Grande Instance de Nanterre ruled that a French resident could not be subject to the ISF for income from a trust created in the USA. And, in 2007, the Court of Cassation nailed the nail in a judgment which underlines the fiscal interest of a trust opened abroad.

“It can therefore be used to plan an estate, prepare for retirement, finance a charity… or simply organize a temporary separation. Sylvio Berlusconi, for example, put his holdings in Italian television channels in a trust during his tenure as Prime Minister, ”it reads in Money Week. And to cite the example of an American resident, of French nationality, who died in France in 1995, whose heirs (French) cashed the succession without paying the least cent to the taxman. Because the deceased was no longer legally the owner of the property, it was not an inheritance but a transfer free of charge.

Not to be outdone, in 2007, France created its own trust, but reserved only for companies: the trust.

Article 2011 of the Civil Code gives us this definition, convoluted for pleasure: “A trust is the operation by which one or more settlers transfer property, rights or securities, or a set of property, rights or collateral, present or future, to one or more trustees who, keeping them separate from their own assets, act for a specific purpose for the benefit of one or more beneficiaries. ”

Well !

It was said, it was a question of curbing offshoring. However, last year, the trust opened to individuals.

For a fixed fee of € 125, anyone can create their trust. Still you have to have something to put in it. We can imagine the advantages on the wealth tax or inheritance tax … But I may be a bad language: the law is too recent to have the slightest idea of ​​its fiscal overlaps.

In the meantime, if Mrs. Bettencourt had slipped her island into a trust under Anglo-Saxon law, which is as old to her as the world, the aces of the financial brigade could have looked for a long time to whom she belonged, because she would not have belonged to no one.

So why did his wealth managers not use this scheme? I will be careful not to repeat the opinion of the tax lawyer who made the effort to introduce me to these techniques …

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