Trusts under threat

The impact of the OECD’s Common Reporting Standard on trusts at a time when they are under threat in a number of continental European jurisdictions

When I first studied trust law under Justice David Hayton TEP and Paul Matthews TEP in 2000, the make-up of the classroom reflected the wide interest in trusts across continental Europe. Italian, Swiss, French, Dutch and Belgian lawyers (among many others) were rubbing shoulders with English, American and Irish lawyers.

This interest was perhaps unsurprising, as continental European countries were lining up to ratify the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition (the Hague Trust Convention). Italy did so in 1992, followed by Malta and the Netherlands (1996), Luxembourg (2004), Liechtenstein and San Marino (2006), Switzerland (2007) and Monaco (2008). Additionally, Belgium introduced in 2004 private international law rules modelled on the Hague Trust Convention.

Even France had a tradition of recognising trusts, with over 20 reported cases dating from the 19th century,1 up to the famous Poillot case of 2004,2 where the court of Nanterre confirmed that a discretionary beneficiary was not liable to wealth tax by reference to the whole of the trust fund (the tax authorities did not appeal).

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