White paper · Fiducie and wealth structuring

The French fiducie: the onshore alternative to the trust

Tax neutrality, a ring-fenced estate, the certainty of civil law: the fiducie of articles 2011 et seq. of the French Civil Code delivers, under French law, the services a trust can no longer deliver once a French connection appears. It is the structural answer to the seven traps of the offshore trust.

Discuss a fiducie The problem first: the trust traps
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— In brief
Nature
A true transfer of ownership to a regulated fiduciary, who keeps the assets separate from their own estate (Civil Code art. 2011)
Taxation
Conditional neutrality: no tax on the transfer where the settlor is a beneficiary of the contract and the conditions of CGI art. 238 quater B or N are met; a gratuitous transfer to a third party is taxed at 60% (art. 792 bis)
Security
The security fiducie is the strongest security interest in French law, outside the creditors' pool in insolvency
Limit
No gratuitous transfers: a fiducie made with donative intent is void as a matter of public policy (Civil Code art. 2013)
Fiduciaries
A closed circle: credit institutions, investment firms, portfolio management companies, insurers, certain public institutions and lawyers (Civil Code art. 2015); registration within one month on pain of nullity (art. 2019)
Migration
For a trust that has become a French problem, the fiducie is the natural restructuring destination
— 01

Why look for an alternative to the trust?

The offshore trust, so efficient for estates with no French connection, becomes a liability the moment a French link appears: heavy reporting obligations (article 1649 AB CGI), inclusion of the real estate assets in the settlor's real estate wealth tax base or, failing that, an annual 1.5% levy (articles 970 and 990 J CGI), transfers taxed at up to 60% (article 792-0 bis CGI), and case law on sham discretionary trusts, in criminal law (Cass. crim. 6 January 2021, no. 18-84.570, Wildenstein) and in inheritance tax (Cass. com. 8 October 2025, no. 24-16.995). Two 2026 decisions add to it: a Jersey trustee with no establishment in France remains bound by the article 1649 AB returns and the penalty (CAA Paris, 5 May 2026, no. 24PA01910, unreported), while the article 990 J levy does not apply to an occupational pension trust, even for a single beneficiary, if the trustee is governed by the law of a State bound to France by an administrative assistance convention (CE, 7 May 2026, no. 511615, unreported). Our twin guide maps them in full.

The question then becomes simple: is there an instrument of French law able to deliver the same services, ring-fencing, professional management, dedication to a defined purpose, without the stigma and the tax cost of the trust? Yes: the fiducie, introduced at articles 2011 et seq. of the Civil Code by the Act of 19 February 2007.

Where the trust is caught by a punitive, self-contained regime, the fiducie enjoys an expressly enacted neutrality regime: for tax purposes the settlor is the holder of the rights representing the transferred assets (article 238 quater A CGI); the transfer is not taxed where the settlor is designated as a beneficiary of the contract and the specific conditions are met (article 238 quater B for balance-sheet assets, article 238 quater N for individuals); where the fiducie ends without liquidation, the return of the assets to the settlor may also be tax-neutral under conditions (article 238 quater K for business assets, article 238 quater Q for individuals). Neutrality ends where the fiducie benefits a third party gratuitously: the transfer is then subject to gift and inheritance tax at 60% (article 792 bis CGI).

— 02

Comparison, use cases and migration

01

Offshore trust versus French fiducie: the comparison

Two instruments close in function, opposites in French tax treatment.

  • Tax treatment: the trust's derogatory regime (article 792-0 bis CGI, up to 60%) against the fiducie's neutrality (article 238 quater A et seq. CGI)
  • Death duties on the trust: since the version of 27 June 2026 of article 792-0 bis, II (law no. 2026-534, art. 84), the administrator pays the duties due under points b and c of 2 with a detailed estimated return, and the beneficiaries are jointly liable for payment and must file the return, failing payment, where the administrator is governed by the law of a non-cooperative State or of a State with no mutual assistance convention on recovery
  • Wealth tax: real estate assets of the trust included in the settlor's base (CGI art. 970; for the former ISF, Cass. com. 28 May 2026, no. 25-12.326, given on a Swiss family foundation), or the 1.5% levy of art. 990 J; fiducie assets taxed in the settlor's hands under ordinary rules, with no overlay
  • Reporting: the trust's punitive regime (article 1649 AB CGI, penalties and joint liability) against registration in the national register of fiducies
  • Administration: any trustee, often offshore, against regulated French fiduciaries
  • Duration: a potentially perpetual trust against a fiducie capped at 99 years, ending on the death of an individual settlor
  • Perception: a presumption of distrust against a recognised instrument, whose regime was negotiated with the legislature
02

Use case no. 1: the security fiducie

The strongest security interest in French law: the creditor, or a fiduciary for its benefit, becomes owner of the assets given as security, outside the creditors' pool in insolvency.

  • The functional equivalent of Anglo-Saxon security trusts, with the enforceability of French civil law on top
  • Complex real estate financings and debt restructurings
  • Security over shareholdings or asset portfolios
  • An alternative to mortgages and pledges where they prove too slow or too fragile against insolvency proceedings
03

Use case no. 2: the management fiducie

Entrusting assets, securities, real estate, works of art, cash, to a professional fiduciary who manages them for a defined purpose.

  • Protecting an executive through a period of exposure; securing the governance of a strategic family asset
  • Organising ownership through a co-ownership dispute or litigation; ring-fencing a portfolio for a vulnerable relative
  • For an international family relocating to France: professional management and a ring-fenced estate without 2181-TRUST returns, without any divestment debate
  • Ordinary tax treatment, including coordination with the parent-subsidiary regime (BOI-IS-BASE-10-10-10-20, § 205)
04

Use case no. 3: migrating a French-connected trust

The most frequent scenario in practice: a Jersey trust, perfectly legitimate at the outset, becomes a source of risk because a French link has appeared. A five-step playbook.

  • Audit of the existing structure: mapping assets and residences, costing the trust exit scenarios (duties, capital gains, final returns, cf. Cass. com. 18 November 2020)
  • Defining the fiduciary purpose: security, management, protection, the purpose drives the regime, the duration and the fiduciary's mission
  • Drafting the contract: fiduciary's powers, oversight committee, replacement conditions, treatment of income, return clauses
  • Securing the tax treatment: the neutrality regime (CGI art. 238 quater A et seq.), real estate treatment, wealth tax coordination, an advance ruling where needed
  • Registration and life of the contract: formalities, reporting to the settlor, periodic compliance reviews
05

How the fiducie neutralises the seven trust traps

For each trap of the French-connected trust, the fiducie provides a point-by-point answer.

  • Forced attribution (792-0 bis) → attribution assumed and neutral (238 quater A), with no punitive overlay
  • 1649 AB returns, penalties, joint liability → national register, with no equivalent punitive reporting regime
  • Wealth tax on trust assets → ordinary IFI in the settlor's hands
  • Transfers at up to 60% → transmission organised separately, at ordinary rates (gift-partition, dismemberment, Dutreil)
  • Sham discretionary trust, criminal exposure → a written, regulated, registered contract: no sham-divestment debate
  • 3% tax and real estate capital gains → a transparent fiducie (BOI-PAT-TPC-10-10), ordinary capital gains rules
  • Substance, effective management, CRS → a regulated French fiduciary, substance by construction
06

The limits of the fiducie: what it does not do

Honesty requires mapping the limits, which outline its true position: an instrument of management, security and protection, not of dynastic transmission.

  • No gifts: a contract made with donative intent is void as a matter of public policy (Civil Code art. 2013)
  • Duration capped at 99 years; the contract ends on the death of an individual settlor, where a dynasty trust crosses generations
  • The circle of fiduciaries is closed to regulated professionals
  • For transmission: gift-partition, dismemberment of ownership, life insurance, the Dutreil pact, combined with the fiducie in an overall architecture
— 03

Lead counsel: Jonathan Bensaid

Founding partner, Jonathan Bensaid heads the firm's fiducie and wealth practice. The firm is one of the few law firms acting as fiduciary on the French market: it designs and drafts fiducie contracts, performs fiduciary missions and handles trust-to-fiducie migrations, with François Ouairy on the trust and international tax side, between Paris and Geneva.

  • Fiducie, Civil Code 2011 et seq.
  • Neutrality, CGI 238 quater A
  • Security fiducie
  • Management fiducie
  • Trust migration
  • Paris · Geneva
— FAQ

Frequently asked questions

What is the tax difference between a trust and a fiducie?

The trust falls under a derogatory regime (article 792-0 bis CGI) with forced attribution to the settlor and taxation of up to 60%, while the fiducie enjoys a regime of neutrality and transparency: the settlor remains the holder of the rights representing the transferred assets (article 238 quater A CGI) and the transfer is not taxed where the settlor is a beneficiary of the contract, subject to the conditions of articles 238 quater B and N. A gratuitous transfer through the fiducie is, however, taxed at 60% (article 792 bis).

Can a fiducie be used to pass on wealth?

No. A fiducie contract made with donative intent is void as a matter of public policy (Civil Code art. 2013). The fiducie is an instrument of management, security and protection; transmission is organised through complementary tools: gift-partition, dismemberment of ownership, life insurance or the Dutreil pact, combined with the fiducie in an overall architecture.

Who can act as fiduciary in France?

Only credit institutions, the institutions and services listed in article L. 518-1 of the Monetary and Financial Code, investment firms, portfolio management companies, insurance undertakings and lawyers (Civil Code art. 2015). This closed circle of regulated professionals is a guarantee of security for the settlor and the beneficiaries, and one of the reasons for the tax authority's confidence in the instrument. Every fiducie is also recorded in the national register of fiducies.

Can an existing trust be replaced by a fiducie?

Yes, a frequent scenario when a trust becomes French-connected. The migration requires a tax audit of the trust exit (transfer duties, capital gains, final returns), the definition of the fiduciary purpose, a tailored contract and the choice of fiduciary, with an advance ruling where needed. Properly run, it moves the structure from a surveillance regime to an ordinary-law regime.

Does the security fiducie survive the debtor's insolvency?

Yes. Assets placed in a security fiducie are removed from the debtor's estate and escape the pool of competing creditors, which makes it the most robust security interest in French law, including against insolvency proceedings. It is the functional equivalent of Anglo-Saxon security trusts, with civil law enforceability on top.

What is the maximum duration of a fiducie?

99 years. The contract also ends on the death of an individual settlor. These limits confirm the instrument's position: the fiducie organises the management, security and protection of assets over one or two generations; it is not a dynastic transmission vehicle.

Is a fiducie subject to the 3% tax on French real estate?

The fiducie is treated as a transparent entity for the 3% tax: the settlor is the person liable (BOI-PAT-TPC-10-10, § 70), where a trust is liable in its own right (§ 90). Real estate capital gains follow ordinary rules. For French property, this is one of the most concrete differences between the two instruments.

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