A new trust law has been brought into effect in France which will enable trustees based in Anglo-Saxon jurisdictions to invest on behalf of beneficiaries, without having to resort to more complicated structures to get around the lack of a concept of trusts in France according to Sykes Anderson LLP.

David Anderson, solicitor and chartered tax adviser at Sykes Anderson LLP, said: ‘The change is likely to see more trust based purchases of French real estate including purchases by pension funds such as SIPPs and offshore trustees. This will be driven by increased client demand. There is likely to be an increase in prices of properties which are attractive investments for trustees. SIPP trustees will find it much easier to purchase commercial property in France including hotel accommodation sold as “leasebacks”.

‘Offshore trustees in Jersey, Guernsey, Man, BVI and Cayman will also be more active in France as the Tax Agreements these countries have signed with France are due to become effective shortly and it is most unlikely the 3% annual tax France has levied on them as tax havens will have to be paid on 1st January 2011.’