British expats living in France could face a huge fine if they do not declare UK inheritance trusts to the Paris tax office, a report has revealed today.
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According to the Daily Mail, the French Government could fine Brits abroad €10,000 (£8,000) if they do not declare any trusts that they have set up or are named in, including life insurance policies.
Though the clampdown will not affect those keeping a holiday home in France unless the property forms part of a trust fund, any expats living in the country full time will be forced to inform the Paris tax office of their assets.
The ruling has caused confusion for many while others may simply be unaware that future payouts, even those as small as £1,000, should be included in the wealth estimate.
Further confusion over the deadline has caused even more concern - the official deadline was June 15 but according to the Mail, Frederic Mege, head of French tax at Legal & General, believes that will change. As yet there has been no confirmation.
Missing the deadline could have serious consequences. For those with trusts worth £200,000 or more, the penalty is either €10,000 or five per cent of the amount, whichever is the larger, while expats with assets in excess of £500,000 could be fined £25,000 if they fail to declare their wealth.
And those whose wealth totals more than €1.3 million (£1.05m) meet the French taxman's requirements will be forced to pay a tax bill of between 0.25 and 0.5 per cent.
Gavin Pluck, Europe director at financial adviser Guardian Wealth Management, told the Mail: "These are bizarre new rules. The wealth tax covers a huge array of financial assets - you could have a low income but find yourself charged this year and paying a €10,000 fine."
Expats in full-time residency in France are advised to speak to their trust companies before the deadline passes.
Have you ever fallen foul of expat tax laws? Leave your comments below...