France

A PERECO is the collective company form of the retirement savings plan (PER) that the PACTE law of 2019 created, and it replaced the PERCO.^1,2,3 A PERCO set up before 1 October 2020 can carry on and take new members.^4,5 All the company's employees can join, after at most three months' service,⁶ and the plan can enrol them by default unless they refuse within 15 days.⁷

Money comes from you and from the company. You can make voluntary payments and put in profit sharing (participation), incentive pay (intéressement), and rights from a time account or unused rest days.⁸ The company can match your money, up to three times your contribution and 16% of the annual social security ceiling,^9,10 about €7,690 for 2026 on a monthly ceiling of €4,005.¹¹ It can also pay in when you do not.¹² A PERECO can also hold compulsory money, paid for all employees or for categories of them, or moved in from another plan.^13,14

The money stays in until you claim your pension or reach the statutory retirement age,¹⁵ except on listed events such as a spouse's death, disability, over-indebtedness, the end of unemployment rights, or buying a main residence.¹⁶ It then comes out as capital or a life annuity, at your choice, except compulsory money, which comes out as a life annuity unless the annuity would be small.^17,18 The plan's rules list what the money can buy, which can be units of an employee fund (FCPE).¹⁹ A plan written as a group insurance contract has its own blocks below.

A former PERCO differs. It stays under the Labour Code, not the PER rules, and the company savings plan rules still apply to it,²⁰ so your voluntary payments stay limited to a quarter of your yearly pay.^21,22,23 Those payments are not deductible in France.²⁴ The money is unavailable until retirement except on listed events,²⁵ and it generally comes out as a life annuity, as capital only if the plan's agreement provides.^26,27 Matching has the same limits as a PERECO's.²⁸

Some funds and banks refuse people resident in the United States. One employee fund's key information document says it is not open to residents of the United States or a "U.S. Person",²⁹ and one bank's PER terms bar a "U.S. Person", which they define by residence in the United States.^30,31 That is not the U.S. tax term.

Not settled: the units are yours and no trustee holds title, but the money is locked for retirement. Cautious: a trust.

Not settled, and no IRS guidance, Treasury text or court decision says whether a French employee savings plan is a trust. Federal law, not France's label, decides.³²

The argument that it is not a trust: French title rules leave no trustee. The holder of a securities account owns the securities recorded in it.³³ The units belong to each member,³⁴ in an individual account in the member's own name at a licensed custodian, as one such contract shows, and that contract covers PER plans.^35,36 The fund has no legal personality: it is a co-ownership of financial instruments and deposits,³⁷ and each unitholder has a co-ownership right in its assets.³⁸ A manager runs it and a depositary keeps the assets,^39,40 and a supervisory board, at least half of it the unitholders' representatives, decides mergers and liquidation.^41,42 A U.S. trust needs trustees who take title,⁴³ IRS advice lists a trustee with legal title among a trust's elements,⁴⁴ and the funds the IRS has ruled on had a trustee or an entity holding the assets.^45,46 A pooled investment whose manager can vary its investments is not classified as a trust,⁴⁷ and as a foreign entity whose holders all have limited liability it would be treated as a corporation unless it elected otherwise.^48,49

The argument that it may be one: form is only evidence,⁵⁰ and an arrangement's purpose is what distinguishes a trust.⁵¹ The purpose here is retirement. The law sets the plan up to pay a pension or capital from retirement and locks the money until then,^15,16,25 and you don't run the money: the manager does more than hold title,⁵² and the default investment is an allocation the plan sets.⁵³ Those are features of the foreign pension fund the IRS privately ruled a trust, an entity whose purpose was to insure pensions,^46,54 and members choosing among listed investments did not stop another fund being one.⁴⁵

With the question open and the penalty for a missing Form 3520-A large,⁵⁵ this guide takes the cautious course of reading a PERECO or former PERCO held through fund units as a trust, and a foreign one, since French law governs it and it is run in France.^56,57 If it is not a trust, none of the steps below apply. A fund whose manager cannot vary its investments may itself be a trust,⁴⁷ but the plan is already read as one here, so the answers don't change.

On the cautious reading, an employees' trust; profit sharing and incentive pay you place in the plan are your own money.

On the cautious course we read it as a §402(b) employees' trust: the employer can pay in for its employees,¹² and a trust created outside the United States cannot be exempt under U.S. §501(a).⁵⁸ §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁵⁹ and on our reading nothing suggests this plan meets §401(a). No IRS ruling addresses French plans. The IRS has ruled privately on a foreign fund with mandatory employer contributions and personal accounts,⁶⁰ but that fund was organized as a trust with a trustee, which a plan held through fund units is not.⁶¹

On that reading, employer contributions are U.S. income as they vest,^62,63 and on our reading they vest at once: the PER rules set no vesting schedule or condition of forfeiture, and your individual rights can move with you to another PER.⁶⁴ We read a former PERCO the same way. The foreign earned income exclusion cannot cover them.⁶⁵ You are not treated as owner of the part they fund.⁶⁶ France exempts matching within its limits, and in a PERECO, for payments since 1 January 2026, only until you turn 70, so there may be no French tax to credit.^67,68 If the plan is not a trust, on our reading the employer's money buys units that are yours at once, which is pay under the rules for property transferred for services, since a lock-up is not a condition of forfeiture, and the exclusion could apply to it.^69,70

Profit sharing and incentive pay you place in the plan count as your own money, not your employer's. You could take them in cash,^71,72 French doctrine lists them as paid in by the beneficiary and only matching as paid in by the employer,⁸ and the IRS Chief Counsel's reading of Singapore's fund treats amounts paid in at the employee's election as the employee's.⁷³ A default placement reads the same way: half of your profit sharing goes into the plan if you give no instruction, and you can take it out within a month,^74,75 and the U.S. rules for §401(k) plans, which do not govern a foreign plan, treat automatic enrollment with a right to opt out as an election.⁷⁶ Compulsory payments withheld from your pay, in a plan that has them, count as the employer's, on the IRS Chief Counsel's reading of Singapore's fund.⁷⁷

Once your own contributions have come to exceed your employer's, you are treated as owner of the part your contributions fund, if the grantor trust rules are otherwise met.⁷⁸ Because that money counts as yours, it can pass your employer's and bring you to Part II: matching stops at 16% of the ceiling,¹⁰ and the French limit on an employee's own payments to a company savings plan does not apply to a PERECO.⁷⁹ A former PERCO keeps that limit on voluntary payments,²⁰ which can still leave room for your money to pass the employer's. You report no contribution to a §402(b) trust on Part I, your own included.⁸⁰ A plan open to all employees should not run into the rule for highly compensated employees, on our reading,^6,81 but compulsory payments reserved to categories of employees may raise it, and that is not settled.¹³

Payouts from the employer's part are taxed under §72 when paid or made available to you, with the employer money already taxed as your basis,^82,83,84 and they stay off Part III if you report them as compensation income,^85,86 unlike payouts from a part you own.⁸⁷ Whether a balance you may draw at retirement is made available before you draw it is not settled.^88,89

Rev. Proc. 2020-17: unlikely for a PERECO, possible for a former PERCO. Proposed regulations: possible, on our reading.

Rev. Proc. 2020-17 exempts an eligible individual (one who has filed U.S. returns and reported the plan's income as U.S. law requires)⁹⁰ from Forms 3520 and 3520-A for a retirement trust that meets its conditions.⁹¹ It is unlikely to cover a PERECO. Some conditions fit. The plan is tax-favored: matching is exempt and income reinvested in the plan is exempt.^92,67,93 Plan managers report each holder's deductible payments to the tax administration every year.^94,95 Payouts are tied to retirement, and a release to buy a primary residence is expressly allowed.^96,97,16 All employees can join, which meets the first part of the employer condition;^98,6 whether the plan actually gives significant benefits to a substantial majority of those eligible, on nondiscriminatory terms, depends on the plan.⁹⁹

Two don't fit. Contributions must come only from earned income,¹⁰⁰ but your voluntary money need not: in a case the French markets regulator's ombudsman reports, an employee paid €40,200 from a property sale into a collective company PER, more than her annual income.¹⁰¹ And contributions must be limited,¹⁰² but the French cap on an employee's own payments to a company savings plan is switched off for a PERECO.⁷⁹

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹⁰³ need contributions only "generally" from earned income, "with allowances made for limited contributions made by unemployed individuals",¹⁰⁴ and let a value test of US$600,000 (adjusted for inflation from 2026) stand in for a limit.¹⁰⁵ The test adds together all your trusts in France, however many.¹⁰⁶ On our reading they are possible for a PER if that total stays under the threshold, though a plan that takes unlimited money from other sources may not fit "generally".

A former PERCO reads differently, and for it Rev. Proc. 2020-17 is possible rather than unlikely. Its quarter-of-pay limit is a percentage limit,^20,21 which on our reading can meet the contribution condition,¹⁰² and the proposed regulations accept the same kind of limit at any value.¹⁰⁷ Company payments and income in the plan are exempt,^92,108 and the money is held to retirement apart from listed events.^96,25 Three points stay open. The PER reporting rule above does not reach a PERCO, whose payments are not deductible, and we found no like rule for it.^94,95,24 The limit is measured on your pay, but nothing we read says the money must come from pay.¹⁰⁰ And French doctrine describes it as a limit on voluntary payments, so we could not confirm that profit sharing and incentive pay count toward it.²³

Article 18(1) taxes employment pensions to a U.S. resident only in France. No relief for a citizen's contributions or plan income.

Payouts. Under Article 18(1) of the U.S.-France treaty, pension distributions arising in France in consideration of past employment and paid to a U.S. resident, whether periodic or a lump sum, are taxable only in France,¹⁰⁹ and a distribution arises in France only if a pension or other retirement arrangement established there pays it.¹¹⁰ The saving clause lets the United States tax its citizens and residents as if the treaty had not come into effect,¹¹¹ but it spares paragraph 1 of Article 18,¹¹² and Treasury says a U.S. citizen living in the United States is taxed solely in France on such a distribution.¹¹³ Whether that reaches a payout from voluntary money you paid in yourself is not settled, because the article speaks of past employment, as the individual plan blocks explain.¹⁰⁹ France's tax administration lists pensions paid by pension funds established in France among what a U.S. resident must report there.¹¹⁴ A treaty position on pensions is waived from Form 8833.¹¹⁵

A U.S. citizen living in France is not a resident of the other country, so Article 18(1) does not reach a private pension. The United States taxes it, with a credit for French tax.¹¹⁶

Contributions. Article 18(2) reaches only someone resident in the United States who is not a U.S. national, whose contributions to the plan began before arriving,^117,118 and it needs the U.S. competent authority's agreement unless the plan is organized under French social security legislation.¹¹⁹ We found no such agreement naming a PER. The saving clause keeps it from citizens and green card holders,^120,121 so a U.S. citizen working in France gets no treaty relief on contributions, and for a citizen or green card holder no article defers the yearly income of a part you own. Treasury says a U.S. resident who is neither is not taxed on the earnings of, or contributions to, a French exempt pension trust.¹²¹ The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²² Treasury officials told GAO few treaties address moves between plans,¹²³ and this one has no rule on whether a move is taxed. Where a treaty is silent, IRS officials said, there is generally no form of transfer that gets deferral.¹²⁴ If a move is a distribution, a U.S. resident may fall under Article 18(1) above, and a citizen living in France does not.

Part II and Form 3520-A each year for the part your own money funds, once it exceeds your employer's; no Part I.

Read on the cautious course as a §402(b) trust. No Part I for any contribution.⁸⁰ No Part II or Form 3520-A for the employer-funded part or compulsory money; once your own money, profit sharing and incentive pay included, exceeds your employer's, Part II and Form 3520-A each year for the part it funds.^66,78,125 No Part III for payouts from the employer-funded part that you report as compensation income;⁸⁵ payouts from a part you own go on Part III, lines 24 and 27.⁸⁷ No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year.^82,126,127

A payout Article 18(1) exempts need not be included in income, and the proposed regulations' exception does not count amounts a treaty exempts, so if you rely on them it stays off Part III;^128,109,103 without relying on them, the instructions' exception asks that it be reported as compensation, so the cautious course is Part III.⁸⁵ A death benefit paid straight to a U.S. beneficiary is a payout from a foreign trust on this reading, and since it is not settled whether a beneficiary can report it as compensation income, the cautious course is to report it on Part III.^129,85

If the plan is a trust but not a §402(b) trust, each contribution of your own is a Part I transfer and you are treated as owner of the part it funds, so Part I, Part II, Form 3520-A and Part III all apply.^{130,131,125,129} Part I also applies at your death as a U.S. citizen or resident, if any part of the plan is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.¹³² If it is not a trust, none of these apply. An eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them.^91,103 On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^133,134,135 No IRS guidance names executors, and the revenue procedure's scope speaks of the eligible individual who would otherwise report.¹³⁶ The funds a plan holds may be subject to the PFIC rules; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

A PEE is a collective savings system that lets employees build a portfolio of securities with their company's help.¹³⁹ Money comes from profit sharing, incentive pay, your voluntary payments and possible matching by the company.¹⁴⁰ Your voluntary payments are limited to a quarter of your yearly pay, or to once your yearly pay for the fund in Labour Code art. L. 3332-16.^21,23,141 Matching can be up to three times your money and 8% of the annual social security ceiling,^9,142 about €3,845 for 2026 on a monthly ceiling of €4,005,¹¹ with up to 80% more where you buy your company's shares,¹⁴³ or 16% for a one-sided payment by the company.¹⁴²

The money can buy units of an employee fund (FCPE), shares of an investment company, or company shares.¹⁴⁴ Units and shares are delivered to you after at least five years,¹⁴⁵ or sooner on listed events that include marriage, a third child, disability, leaving the job, and buying a main residence.^146,147 Some funds refuse residents of the United States, as one employee fund's key information document does.²⁹

Not a trust, on our reading: you own the units, the fund has no trustee, and this is five-year savings, not a retirement plan.

Not a trust, on our reading, and no IRS guidance addresses a PEE. You own the units: the law speaks of the units belonging to each member,³⁴ and they sit in an individual account in your own name at a licensed custodian, as one such contract shows.³⁵ The holder of a securities account owns what it records.³³ The fund has no legal personality and no trustee: it is a co-ownership,³⁷ each unitholder has a co-ownership right in its assets,³⁸ and a supervisory board, at least half of it the unitholders' representatives, decides mergers and liquidation.^41,42 A U.S. trust needs trustees who take title,⁴³ and IRS advice lists a trustee with legal title among a trust's elements.⁴⁴

The law speaks of units acquired for employees and delivered after five years,¹⁴⁵ but it also says they belong to you, so on our reading the wait is a restriction on what is already yours.³⁴ The savings are released after five years and this is not a retirement plan, so the rule that a pooled investment whose manager can vary its investments is not a trust can apply here,^47,145 where a retirement fund's purpose might outweigh it.⁵¹ As a foreign entity whose holders all have limited liability, the fund would be treated as a corporation unless it elected otherwise.^48,49 A fund whose manager cannot vary its investments may itself be a trust,⁴⁷ so check the rules of a fund such as one holding mainly your employer's shares.¹⁴⁸ If yours cannot vary them, whether it is a trust is not settled: that rule points to a trust, and the no-trustee facts above point away. The cautious course is then to treat your units in that fund as the PERECO block treats a plan: Part II and Form 3520-A once your own money exceeds your employer's, and Part III for payouts from a part you own.^78,125,129

Applies only to a trust. Matching buys units that are yours at once, so on our reading it is pay when paid in.

§402(b) reaches only an employer's contributions to an employees' trust,⁶² so on our reading it doesn't apply. Matching buys units that are yours at once. On our reading that is pay under the rules for property transferred for services when it is paid in, since a five-year wait is not a condition of forfeiture,^69,70 even though France exempts it within its limits.⁶⁷ Profit sharing and incentive pay you place in the plan are your own pay: you could take them in cash,^71,72 and the IRS Chief Counsel's reading of Singapore's fund treats amounts paid in at the employee's election as the employee's.⁷³

Not needed. It would not qualify anyway: a savings plan released after five years is not a retirement arrangement.

Not needed: §6048 reaches only foreign trusts.¹³⁰ A PEE would not qualify in any case. Rev. Proc. 2020-17 needs a trust operating exclusively or almost exclusively to provide pension or retirement benefits,⁹¹ and this one releases savings after five years,¹⁴⁵ and its other category is for medical, disability or educational benefits.¹⁴⁹

No relief: a PEE is not a pension, so the saving clause leaves U.S. tax in place.

No relief, on our reading. Article 18 of the U.S.-France treaty covers pensions and other retirement arrangements,¹¹⁰ and a five-year savings plan is not one,¹⁴⁵ so the saving clause lets the United States tax its citizens and residents as if the treaty had not come into effect.¹¹¹

Nothing on Form 3520 or 3520-A, on our reading, unless a fund's manager cannot vary its investments.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts,^130,125,129 and on our reading a PEE is not one. The exception is a fund whose manager cannot vary its investments, as the classification step explains. The funds a plan holds may be subject to the PFIC rules; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

A PER obligatoire covers all of a company's employees or objective categories of them, and joining is compulsory for those covered.¹⁵⁰ The employer pays, employees may have to pay too, and they can add voluntary money.^151,152 Compulsory money pays out only as a life annuity, unless the annuity would be small,^17,18 and cannot be released to buy a home.¹⁵³ France deducts these payments, the employer's included, up to 8% of gross pay on up to eight social security ceilings,¹⁵⁴ and not from your 70th birthday since 2026.¹⁵⁵

An Article 83 contract is the older form, taken out with an insurance company by the employer.¹⁵⁶ Since 1 October 2020 a new one must be a PER obligatoire, and existing ones can still take new members.^157,5 Any company PER written as a group insurance contract is covered here too.¹⁵⁸ A company plan opened as a securities account is not covered here, whatever it is called: read it as in the PERECO block above, which is not settled.¹⁵⁸

An FRPS (fonds de retraite professionnelle supplémentaire) is a company whose business is limited to supplementary retirement cover.¹⁵⁹ An institution de prévoyance or a mutuelle can write the same plans; those have their own block below.

Not a trust, on our reading: a group contract. The insurer holds the assets; you hold a claim. No IRS guidance addresses it.

Not a trust, on our reading, and no IRS guidance addresses these contracts. A member joins a group insurance contract.^158,160 The insurer owns what backs its promise: it holds the fund units,¹⁶¹ votes the securities it holds for the plan,¹⁶² and the members' protection is a priority claim on a ring-fenced account, not title.¹⁶³ A trust for U.S. purposes needs trustees who take title to property to protect or conserve it for the beneficiaries,⁴³ which a contract with an insurer does not create.

A French insurer must be a stock company, a mutual insurer or a European company,¹⁶⁴ and it writes contracts under a licence from the regulator.¹⁶⁵ A French stock company is on the list of foreign entities always treated as corporations,¹⁶⁶ and the Code's corporations include insurance companies,¹⁶⁷ meaning companies more than half of whose business is issuing insurance or annuity contracts.¹⁶⁸ Those rules apply to an entity that isn't properly a trust, so the trust question comes first,^169,170 and the IRS has privately ruled a foreign pension entity a trust although its purpose was to insure pensions and its regulator also supervised insurers.^46,54 That entity served only covered employees, and the ruling doesn't say it was licensed as an insurer. A mutual insurer has a non-commercial object,¹⁷¹ but its contract is still a policy it writes as an insurer.

An FRPS looks closer to that entity, since retirement cover is its only business.¹⁵⁹ But it must be a stock company or a mutual insurer, and it is treated as a life insurer for the contracts it writes.^172,173

Applies only to a trust; employer premiums for an annuity contract are pay under §403(c).

§402(b) reaches only an employer's contributions to an employees' trust,⁶² so on our reading it doesn't apply. An employer's premiums for an annuity contract are your income under the rules for property transferred for services;¹⁷⁴ no IRS guidance says whether one of these contracts is an annuity contract. If it is instead a contract providing life insurance protection, its cash value and other rights, apart from current life protection, count as property under the same rules, so the result is much the same.¹⁷⁵ Your own voluntary payments are your own pay.⁷³

Not needed for a contract with an insurer.

Not needed: §6048 reaches only foreign trusts.¹³⁰

Article 18(1) taxes employment pensions to a U.S. resident only in France. No relief for a citizen's contributions.

The same as for a PERECO. Article 18(1) makes a payout to a U.S. resident taxable only in France,^109,112,113 though whether that reaches a payout from your voluntary money is not settled, because the article speaks of past employment.¹⁰⁹ A U.S. citizen living in France is taxed by the United States with a credit,¹¹⁶ and Article 18(2) gives contribution relief only to someone neither a citizen nor a green card holder, for a plan they joined before arriving.^117,118,120 A treaty position on pensions is waived from Form 8833.¹¹⁵

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^130,125,129 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

The PER rules let these bodies write the same plans as an insurer.¹⁷⁶ An institution de prévoyance is a private non-profit body run jointly by employer members and participant members,¹⁷⁷ and an IRPS is one whose business is limited to supplementary retirement cover.¹⁷⁸ A mutuelle or an MRPS under the Mutuality Code is the mutual equivalent.¹⁷⁹ Your plan's contract names the provider. What you and your employer pay, and when it comes out, follow the block above.^152,17

An Article 39 plan run by one of these bodies follows this block too. A plan created from 1 January 2010 must be run by such a body or an insurer,¹⁸⁰ and a newer-form contract can be written by a provident institution or a mutual body.¹⁸¹ The Article 39 block says what those plans are.

Not settled: a body that owes you a contract benefit, yet a private ruling held a pension body a trust. Cautious: a foreign trust.

Not settled, and no IRS guidance addresses these bodies. The argument that it is a trust: an arrangement's purpose decides, not its legal form,^51,50 and in a private ruling the IRS held a foreign pension entity to be a trust although its purpose was to insure the pensions of covered employees, its regulator also supervised insurers, and its benefits followed a formula.^46,54 On our reading a non-profit body covering a company's or a sector's employees has that same purpose, set up by collective agreement or employer decision,^177,182 and an IRPS has no other business.¹⁷⁸ An older Article 39 plan is close to that ruling's facts, since benefits there followed final salary and years of service.¹⁸³

The argument that it is not: the body itself owes the benefit as an insurer does,¹⁸⁴ and the Code treats insurance companies as corporations and their members as shareholders.^167,185,168 A trust's beneficiaries cannot share in the responsibility for the property,¹⁸⁶ but here participant members help run the body,¹⁷⁷ while the employees in that ruling had no control over what was withheld.¹⁸⁷ Chief Counsel advice on Liechtenstein entities, which is not precedent, notes that a Stiftung has no members or board.¹⁸⁸

With the question open and the penalty for a missing Form 3520-A large,⁵⁵ this guide takes the cautious course of reading one of these bodies as a trust, and a foreign one, since French law governs it and it is run in France.^56,57 If it is not a trust, none of the steps below apply.

On the cautious reading, an employees' trust; compulsory money is the employer's, profit sharing and voluntary money are yours.

On the cautious reading this is a §402(b) employees' trust: an employer pays in for its employees, and a trust created outside the United States cannot be exempt under U.S. §501(a).⁵⁸ §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁵⁹ and on our reading nothing suggests this plan meets §401(a). No IRS ruling addresses French plans. The IRS has ruled privately on a foreign fund with mandatory employer contributions and personal accounts,⁶⁰ but that fund was organized as a trust with a trustee, which these bodies are not.⁶¹

On that reading, employer contributions are U.S. income as they vest,^62,63 and the foreign earned income exclusion cannot cover them.⁶⁵ In a PER they vest at once, on our reading, since the PER rules set no vesting schedule or condition of forfeiture and your rights can move with you to another PER.⁶⁴ A contract that is not a PER can differ. The Insurance Code lets such contracts with an insurer or FRPS set waiting periods of up to three years in total,¹⁸⁹ and we did not read the rule for these bodies, so check your contract. In an older Article 39 plan rights depend on finishing a career at the company,¹⁹⁰ so on our reading they vest only then, when the value of your interest is included.¹⁹¹ You are not treated as owner of the part employer money funds.⁶⁶

Compulsory payments withheld from your pay under the plan's rules count as the employer's, on the IRS Chief Counsel's reading of Singapore's fund,⁷⁷ and voluntary payments as your own.⁷³ Profit sharing and incentive pay you place in the plan count as your own money too, as in the PERECO block: you could take them in cash,^71,72 and French doctrine lists them as paid in by the beneficiary.⁸ A compulsory plan can take them where the company has a retirement plan open to all employees.¹⁹² Once your own contributions exceed your employer's, you are treated as owner of the part they fund, if the grantor trust rules are otherwise met.⁷⁸ A plan limited to categories of employees may raise the rule for highly compensated employees,^150,81 and no contribution to a §402(b) trust is a Part I event.⁸⁰

Payouts from the employer's part are taxed under §72 when paid or made available to you,^82,83 and they stay off Part III if you report them as compensation income,^85,86 unlike payouts from a part you own.⁸⁷

Rev. Proc. 2020-17: unlikely if the plan takes voluntary money, as a PER must. Proposed regulations: possible, on our reading.

Rev. Proc. 2020-17 exempts an eligible individual⁹⁰ from Forms 3520 and 3520-A for a retirement trust that meets its conditions.⁹¹ It is unlikely to cover a plan that takes voluntary money, for the reason given in the PERECO block. Contributions must come only from earned income,¹⁰⁰ but a compulsory PER must be able to take voluntary money,¹⁵² and on our reading nothing limits where that money comes from. A PERECO written by one of these bodies has no French limit on your own payments either.⁷⁹ Other conditions point the right way. The plan is tax-favored,^92,154 managers report voluntary payments to the tax administration each year,^94,95 and compulsory money comes out from retirement as a life annuity, unless the annuity would be small.^96,17,18 Whether a plan limited to categories of employees meets the employer condition depends on the plan.^98,150

A plan that takes no voluntary money, such as an older Article 39 plan the employer alone funds,¹⁹⁰ avoids that problem, so for it the exemption is possible, with the contribution limit and yearly reporting open. Where the 8% applies, it limits what France deducts, not what can be paid in.^102,154

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹⁰³ need contributions only "generally" from earned income, "with allowances made for limited contributions made by unemployed individuals",¹⁰⁴ and let a value test of US$600,000 (adjusted for inflation from 2026) stand in for a contribution limit.¹⁰⁵ The test adds together all your trusts in France, however many.¹⁰⁶ On our reading they are possible if that total stays under the threshold, though a plan that takes unlimited money from other sources may not fit "generally".

Article 18(1) taxes employment pensions to a U.S. resident only in France. No relief for a citizen's contributions or plan income.

The same as for a PERECO. Article 18(1) makes a payout to a U.S. resident taxable only in France,^109,112,113 though whether that reaches a payout from your voluntary money is not settled, because the article speaks of past employment.¹⁰⁹ A U.S. citizen living in France is taxed by the United States with a credit,¹¹⁶ and Article 18(2) gives contribution relief only to someone neither a citizen nor a green card holder, for a plan they joined before arriving.^117,118,120 For a citizen or green card holder no article defers the yearly income of a part you own, and the IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²²

Part II and Form 3520-A each year for the part your own money funds, once it exceeds your employer's; no Part I.

Read on the cautious course as a §402(b) trust. No Part I for any contribution.⁸⁰ No Part II or Form 3520-A for the employer-funded part or compulsory money; once your own money, profit sharing and incentive pay included, exceeds your employer's, Part II and Form 3520-A each year for the part it funds.^66,78,125 No Part III for payouts from the employer-funded part that you report as compensation income;⁸⁵ payouts from a part you own go on Part III, lines 24 and 27.⁸⁷ No Form 4970: payouts from a §402(b) trust are taxed under §72, and the income of a part you own is taxed to you each year.^82,126,127

A payout Article 18(1) exempts need not be included in income, and the proposed regulations' exception does not count amounts a treaty exempts, so if you rely on them it stays off Part III;^128,109,103 without relying on them, the cautious course is Part III.⁸⁵ A death benefit paid straight to a U.S. beneficiary is a payout from a foreign trust on this reading, and since it is not settled whether a beneficiary can report it as compensation income, the cautious course is to report it on Part III.^129,85 An Article 39 plan the employer alone funds has no part you own, so for it only the payout lines can matter.¹⁹⁰

If it is not a trust, none of these apply. An eligible individual whose plan qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them.^91,103 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

Article 39 plans are top-up pensions the employer promises. In the older form rights depend on finishing a career at the company and the employer's funding cannot be tied to any one employee.¹⁹⁰ That form has been closed since July 2019: no new plans or members, and generally no new conditional rights for work after 1 January 2020.¹⁹³ In the newer form rights build up each year, under a retirement contract the employer takes out for one or more employees.¹⁹⁴ The rules for such contracts with an insurer or FRPS speak of contributions by the employer and, where that applies, by you.¹⁹⁵

A plan created from 1 January 2010 must be run by a provident institution, a mutual body or an insurer.¹⁸⁰ One run by an institution de prévoyance or a mutuelle follows the block above on those bodies, not this one.

Not a trust, on our reading: a contract with an insurer or a provision on the employer's books. No trustee holds assets.

Not a trust, on our reading, and no IRS guidance addresses these plans. A trust for U.S. purposes needs trustees who take title to property to protect or conserve it for the beneficiaries.⁴³ Here the employer funds the plan by premiums to an insurer, or by a provision on its own books,¹⁹⁶ or through a retirement contract,¹⁹⁴ and no trustee holds assets for you.

The IRS has privately ruled a foreign pension entity a trust, on facts that include benefits based on final salary and years of service,^46,183 which is close to an older Article 39 plan. A contract with an insurer or FRPS stands apart, as the insurer block explains,¹⁷³ and a provision on the employer's own books sets no property aside. A plan run by an institution de prévoyance or a mutuelle does not stand apart in that way, so it takes that block's cautious course.¹⁸⁰

Does not apply: there is no employees' trust to contribute to.

§402(b) reaches only an employer's contributions to an employees' trust,⁶² and on our reading there is no such trust here.¹⁹⁰

Not needed.

§6048 reaches only foreign trusts.¹³⁰

Article 18(1) taxes employment pensions to a U.S. resident only in France.

Article 18(1) makes a payout to a U.S. resident taxable only in France,^109,112,113 and a U.S. citizen living in France is taxed by the United States with a credit.¹¹⁶

Nothing on Form 3520 or 3520-A here. A plan run by an institution de prévoyance or mutuelle follows the block above on them.

No Part I, Part II, Form 3520-A, Part III, or Form 4970 for a plan with an insurer, FRPS or book provision: Forms 3520 and 3520-A report foreign trusts.^130,125,129 A plan run by an institution de prévoyance or a mutuelle instead follows the block on those bodies.¹⁸¹ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

Private-sector employees have a basic pension from the general scheme, topped up by the compulsory supplementary scheme Agirc-Arrco.¹⁹⁷ Agirc-Arrco is a point-based system whose contributions are shared between employer and employee.^198,199 It is run by private non-profit institutions that employees must belong to.^200,201

RAFP, the compulsory points scheme for civil servants, operates on a funded basis,²⁰² so this block does not cover it, and this guide does not say whether it is a trust.

Not a trust: pay-as-you-go. Contributions pay current retirees, and no fund is held for you.

Not a trust. French law affirms pay-as-you-go retirement,²⁰³ and the contributions paid to Agirc-Arrco, like those to the basic scheme, are immediately used to pay current retirees' pensions.²⁰⁴ Points are not a share of any fund, so no one holds property for you,⁴³ even though Agirc-Arrco's institutions are private bodies, membership is compulsory, and benefits follow a formula, as in the pension entity the IRS privately ruled a trust.^201,46

Does not apply: there is no trust to contribute to.

§402(b) reaches an employer's contributions to an employees' trust,⁶² and these schemes have no trust.²⁰⁴

Not needed.

§6048 reaches only foreign trusts.¹³⁰

Taxable only in France if paid to a U.S. resident or a U.S. citizen, and the saving clause spares that.

Article 18(1) makes payments under France's social security or similar legislation, to a U.S. resident or to a U.S. citizen, taxable only in France,¹⁰⁹ and the saving clause spares that.¹¹² Treasury says France has exclusive jurisdiction over such payments to a resident of France who is a U.S. citizen.²⁰⁵ On our reading Agirc-Arrco is within those words, since the Social Security Code makes it compulsory.²⁰⁰ A treaty position on social security is waived from Form 8833.²⁰⁶

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts, and these schemes are not trusts.^130,125,129 Form 8938 does not count a foreign government's social security.²⁰⁷ On our reading that covers the basic scheme; whether it covers Agirc-Arrco, compulsory by law but run by private bodies, is not settled.²⁰¹ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

A PER individuel with an insurer is a group insurance contract, taken out by an association that represents the holders, which you join.^158,208 Only you pay in, though money from other plans can be transferred in.²⁰⁹ Your payments are deductible in France up to 10% of earned income on up to eight social security ceilings, or 10% of one ceiling if higher, less what your other retirement plans use, unless you opt out,^210,211,212 and not from your 70th birthday since 2026.¹⁵⁵ Unused room carries forward five years, and someone new to France gets an added ceiling.^213,214 The money stays in until you claim your pension or reach the statutory retirement age, except on listed events such as buying a main residence.^15,16

Not a trust, on our reading: a group insurance contract. The insurer holds the assets; you hold a claim.

Not a trust, on our reading, and no IRS guidance addresses it. One real plan calls itself a group life insurance contract, and says the insurer commits only to the number of units, not their value.^215,216 The insurer owns what backs its promise and votes the securities,¹⁶² and your protection is a priority claim on a ring-fenced account, not title.¹⁶³ The association holds no assets: it represents the holders, with a surveillance committee.^208,217 A trust for U.S. purposes needs trustees who take title,⁴³ which a contract does not create.

A mutuelle or an institution de prévoyance can write this contract too,¹⁷⁶ and it is still a contract sold through that association. The private ruling that held a foreign pension entity a trust concerned a body serving covered employees,⁴⁶ which this is not. The product's name doesn't decide: the plan above has "Titres" (securities) in its name and is an insurance contract, so read the document.²¹⁵

Does not apply: no employer pays in, and this is a contract.

§402(b) reaches only an employer's contributions to an employees' trust,⁶² so it does not apply to a contract only you pay into.

Not needed for a contract with an insurer.

Not needed: §6048 reaches only foreign trusts.¹³⁰

Article 18(1) can reach a pension from it, but that is not settled, because the article speaks of past employment.

Article 18(1) can reach a pension from such a plan, but that is not settled, because the article speaks of past employment.^109,112 A plan funded only by you has no employment behind it, though Treasury's 2004 explanation sums up the rule without those words, as covering what a pension or other retirement arrangement established in one country pays to a resident of the other.²¹⁸ Its 2009 explanation keeps them.²¹⁹ A U.S. citizen living in France is taxed by the United States with a credit.¹¹⁶ A treaty position on pensions is waived from Form 8833.¹¹⁵

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^130,125,129 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

A PER individuel can be a securities account, with a linked cash account, opened with a bank or an investment firm through a licensed adviser, with only one holder.^220,221,222 Only you pay in, though money from other plans can be transferred in.²⁰⁹ Unless you decide otherwise, your payments follow an allocation that reduces risk as you near retirement.⁵³ One real plan offers that managed form by default, or free management.²²³

Your payments are deductible in France up to 10% of earned income on up to eight social security ceilings, or 10% of one ceiling if higher, less what your other retirement plans use, unless you opt out,^210,211,212 and not from your 70th birthday since 2026.¹⁵⁵ Unused room carries forward five years, and someone new to France gets an added ceiling.^213,214 Income reinvested in the plan is exempt.⁹³ The money stays in until you claim your pension or reach the statutory retirement age, except on listed events such as buying a main residence.^15,16 Some banks refuse people resident in the United States: that same plan's terms bar a "U.S. Person", which they define by residence there.^30,31 That is not the U.S. tax term.

Not settled: you own the securities and no trustee holds title, but the money is locked for retirement. Cautious: a trust.

Not settled, and no IRS guidance, Treasury text or court decision says whether a French retirement securities account is a trust. Federal law, not France's label, decides.³²

The argument that it is not a trust: the holder of a securities account owns the securities recorded in it,³³ and one real plan's terms speak of the securities the client owns.²²⁴ No trustee holds title, so the elements IRS advice lists for a trust are not all there,^44,43 and a title-holder who only acts at the owner's direction is not a trustee.²²⁵ A fund the account holds is a separate matter, and one whose manager can vary its investments is not classified as a trust.⁴⁷

The argument that it may be one: form is only evidence,⁵⁰ and an arrangement's purpose is what distinguishes a trust.⁵¹ The purpose here is retirement, and the law locks the money until then.^15,16 The firm does more than hold title,⁵² since by default the money follows an allocation the plan sets,⁵³ and securities may be held by a third party in the bank's name.²²⁴ Those are features of the foreign pension fund the IRS privately ruled a trust,⁴⁶ and members choosing among listed investments did not stop another fund being one.⁴⁵

With the question open and the penalty for a missing Form 3520-A large,⁵⁵ this guide takes the cautious course of treating it as a foreign trust, since French law governs it and it is run in France.^56,57 If it is not a trust, none of the steps below apply.

Does not apply where only you pay in.

§402(b) reaches only an employer's contributions to an employees' trust,⁶² so it does not apply to a plan only you pay into. If employer money was transferred in from a company plan,²⁰⁹ read that part as in the PERECO block above.

Rev. Proc. 2020-17: unlikely, with no earnings test or limit on what you pay in. Proposed regulations: possible, on our reading.

Rev. Proc. 2020-17 is unlikely. Contributions must come only from earned income and be limited,^100,102 but any individual can pay in,²²⁶ one real individual PER is open to people who don't work,²²⁷ and the limit is on what France deducts, not on what you pay in.²¹⁰ The employer condition doesn't apply to a plan no employer maintains.⁹⁸

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,¹⁰³ need contributions only "generally" from earned income, "with allowances made for limited contributions made by unemployed individuals",¹⁰⁴ and let a value test of US$600,000 (adjusted for inflation from 2026) stand in for a limit.¹⁰⁵ The test adds together all your trusts in France, however many.¹⁰⁶ On our reading they are possible for a plan if that total stays under the threshold, though a plan that takes unlimited money from other sources may not fit "generally". A release to buy a home does not fail the payout condition under either text.^97,228

Article 18(1) can reach a pension from it, but that is not settled, because the article speaks of past employment.

Article 18(1) can reach a pension from such a plan, but that is not settled, because the article speaks of past employment.^109,112 A plan funded only by you has no employment behind it, though Treasury's 2004 explanation sums up the rule without those words, as covering what a pension or other retirement arrangement established in one country pays to a resident of the other.²¹⁸ Its 2009 explanation keeps them.²¹⁹ For a citizen or green card holder no article defers the plan's yearly income, and a U.S. citizen living in France is taxed by the United States with a credit.^111,116 The IRS has said of Canadian plans that Forms 3520 and 3520-A still apply even where a treaty defers tax.¹²²

On the cautious course, full reporting, as for a foreign trust you own.

On the cautious course, you report it as a foreign trust you own: you are treated as owner of the part your contributions fund, including contributions made before you became a U.S. person, because its income is held for you,^229,131 so Part II and Form 3520-A are due each year,¹²⁵ and payouts go on Part III.¹²⁹ Each contribution you make as a U.S. person is a Part I transfer,¹³⁰ and one made within 5 years before your U.S. residency started is treated as made on your residency starting date and goes on Part I for that year.²³⁰ Part I also applies at your death as a U.S. citizen or resident, if any part of the plan is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.¹³² If the firm does not file Form 3520-A, you attach a substitute to your Form 3520.²³¹ No Form 4970, because the income is taxed to you each year.¹²⁷ If it is not a trust, none of these apply. An eligible individual whose plan qualifies under the proposed regulations files none of them.¹⁰³ On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^135,232 No IRS guidance names executors. The funds an account holds may be subject to the PFIC rules; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

A Madelin contract is a group contract for self-employed people or farmers,²³³ and a PERP is a group contract tied to leaving work, taken out by an association.²³⁴ These and the public-sector supplementary contracts listed with them have taken no new members since 1 October 2020, unless converted into a PER.^235,5 Rights in them can be moved to a PER.²³⁶

Not a trust, on our reading: group contracts you join. A contract with the listed mutual body reads the same; not settled.

Not a trust, on our reading, and no IRS guidance addresses them. A Madelin contract and a PERP are group contracts under the Insurance Code,^233,234 and the listed public-sector contract and group convention fall under that Code too.²³⁷ A trust for U.S. purposes needs trustees who take title,⁴³ which a contract does not create. Contracts with the Union mutualiste retraite sit under the Mutuality Code instead.²³⁸ We read them the same way, since each is a contract a person joins, as for a mutuelle's individual PER in the block above, but that is not settled.¹⁷⁶

Does not apply: no employer pays in, and these are contracts.

§402(b) reaches only an employer's contributions to an employees' trust,⁶² so it does not apply to these contracts.

Not needed for a contract with an insurer.

Not needed: §6048 reaches only foreign trusts.¹³⁰

Article 18(1) can reach a pension from one, but that is not settled, because the article speaks of past employment.

Article 18(1) can reach a pension from such a plan, but that is not settled, because the article speaks of past employment.^109,112 A U.S. citizen living in France is taxed by the United States with a credit.¹¹⁶

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^130,125,129 FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

An assurance-vie is a life insurance contract used for savings, and a capitalisation contract works the same way with no life cover. The sum owed can be in euros or expressed in units of account made up of securities or other listed assets.²³⁹ You or the beneficiary are paid in cash, with a limited option to take delivery of securities.²⁴⁰ One real contract says the insurer commits only to the number of units, not their value.²⁴¹ For a nonresident, France takes a flat levy on the interest when the contract is redeemed: 12.8% if held under eight years, 7.5% if over (rates at 1 January 2026).^242,243

Not a trust, on our reading: an insurance contract, including unit-linked money. The insurer holds the assets.

Not a trust, on our reading, and no IRS guidance addresses assurance-vie. The insurer holds title and owes a contract sum, and a trust for U.S. purposes needs trustees who take title to property to protect or conserve it for the beneficiaries.⁴³ Unit-linked money doesn't change that: the units measure what the insurer owes.^239,241

The private ruling that held a foreign pension entity a trust concerned a body serving covered employees,⁴⁶ which an insurer selling savings contracts is not. Where a holder controls the assets behind a variable contract, the IRS can treat the holder as owner of those assets,²⁴⁴ but that makes the holder the direct owner for income tax. It does not make a trust.

Does not apply: no employer pays in, and this is a contract.

§402(b) reaches only an employer's contributions to an employees' trust,⁶² and no employer pays into a contract you take out yourself.

Not needed, and it would not qualify: this is general savings.

Not needed: §6048 reaches only foreign trusts.¹³⁰ It would not qualify in any case: Rev. Proc. 2020-17 covers only retirement trusts and medical, disability, or educational savings trusts.²⁴⁵

No relief: it is not a pension, so the saving clause leaves U.S. tax in place. France may reduce its own levy by treaty.

No relief. Article 18 covers pensions and other retirement arrangements,¹¹⁰ and an assurance-vie is not one, so the saving clause lets the United States tax its citizens and residents as if the treaty had not come into effect.¹¹¹ France says its rates on redemption may be reduced under treaties.²⁴⁶

Nothing on Form 3520 or 3520-A. Its U.S. income tax is not decided here.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^130,125,129 How the contract's growth and payouts are taxed in the United States is not decided here. A death benefit is covered under gifts and inheritances below.²⁴⁷ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

A PEA is a share savings plan that only someone tax-resident in France can open.^248,249 It is a securities account with a linked cash account or, with an insurer, a capitalisation contract.²⁵⁰ You can pay in up to €150,000 since opening.²⁵¹ After five years a partial withdrawal no longer closes the plan, and before then a withdrawal generally does.²⁵² You can keep it after leaving France, unless you move to a listed non-cooperative state.²⁵³

Not a trust, on our reading: you own the securities, with no retirement lock; or it is a contract with an insurer.

Not a trust, on our reading, and no IRS guidance addresses it. The holder of a securities account owns the securities recorded in it,³³ so no trustee holds title,^43,44 and a title-holder who only acts at the owner's direction is not a trustee.²²⁵ Nothing here is locked for retirement, and the plan has no retirement purpose.²⁵² A capitalisation contract is a contract with an insurer, as in the assurance-vie block above.²⁵⁰

Does not apply: no employer pays in.

§402(b) reaches only an employer's contributions to an employees' trust,⁶² and no employer pays into a PEA.

Not needed, and it would not qualify: this is general savings.

Not needed: §6048 reaches only foreign trusts.¹³⁰ It would not qualify in any case: Rev. Proc. 2020-17 covers only retirement trusts and medical, disability, or educational savings trusts.²⁴⁵

No relief: it is not a pension, so the saving clause leaves U.S. tax in place.

No relief. Article 18 covers pensions and other retirement arrangements,¹¹⁰ and a PEA is not one, so the saving clause lets the United States tax its citizens and residents as if the treaty had not come into effect.¹¹¹

Nothing on Form 3520 or 3520-A.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^130,125,129 The funds a PEA holds may be subject to the PFIC rules; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^137,138

A fiducie transfers assets to a fiduciary, who keeps them separate from its own and acts for a stated aim for the benefit of one or more beneficiaries.²⁵⁴ It is set up by law or by contract,²⁵⁵ and the contract is void if it is made as a gift to the beneficiary.²⁵⁶ The grantor or the fiduciary can be a beneficiary.²⁵⁷ Only banks, investment firms, portfolio managers, insurers and lawyers can be fiduciaries.²⁵⁸ It can last at most 99 years, and it ends when a grantor who is a natural person dies.^259,260 So it is not a family trust. It can also secure a debt, and then the grantor's death does not end it.^261,262

A foreign trust, on our reading: a fiduciary holds title apart from its own assets for beneficiaries. Security use: not settled.

A foreign trust, on our reading, and no IRS guidance addresses the fiducie. The fiduciary takes title and must act for the beneficiaries,²⁵⁴ which is what a trust is for U.S. purposes,⁴³ and IRS advice lists those same elements.⁴⁴ Governed by French law and run in France, it meets neither test for a domestic trust, so it is foreign.^56,57

A fiducie used to run a business may be a business entity instead of a trust.²⁶³ A fiducie that only secures a debt is not settled: the fiduciary holds title,^261,262 but the purpose isn't to protect or conserve property for beneficiaries,¹⁸⁶ and the IRS's ruling on title-holders doesn't help where the holder does more than hold title.⁵² The cautious course is to report it as a foreign trust; if it is not a trust, none of this applies.

A U.S. person who funds it is owner when it has a U.S. beneficiary; a grantor who can benefit or revoke may be owner anyway.

Who is treated as owner decides who files Part II and Form 3520-A. A U.S. person who transfers property to the fiducie is treated as owner of the part it funds for any year in which it has a U.S. beneficiary.¹³¹ Someone who funds it while not a U.S. resident and becomes one within 5 years is treated, for this rule and for Part I, as transferring that part on the day their U.S. residency starts.²³⁰ A U.S. grantor who can be a beneficiary, or who can revoke the contract until a beneficiary accepts, can be owner under the other grantor rules too.^{257,264,229,265} A grantor who is not a U.S. person is treated as owner only in narrow cases.²⁶⁶ Otherwise, unless another grantor trust rule makes a U.S. person owner,²²⁹ no one is owner, and the trust is taxed as a separate, non-grantor trust.²⁶⁷

A trust has a U.S. beneficiary for the transferor rule if anyone has discretion to pay or benefit any person, unless its terms identify the class who may benefit and none of them is a U.S. person that year,²⁶⁸ even if nothing is paid to a U.S. person that year;²⁶⁹ a power to amend the trust to benefit a U.S. person counts, and so does a letter of wishes or other understanding that points to benefiting one, even one that says it is only a suggestion.²⁷⁰ Where a U.S. person funds the trust, the IRS may treat it as having a U.S. beneficiary unless that person shows it has none.²⁷¹ A beneficiary who first became a U.S. person more than 5 years after the transfer is not counted,²⁷² and a transferor whose trust gains a U.S. beneficiary is taxed that year on the income the trust kept for that part to the end of the year before, as an accumulation distribution with the interest charge.^273,274 A settlor who is not a U.S. person keeps the revocable-trust exception for a year only if they can take the property back alone, or with the consent of a related or subordinate party subservient to them, for at least 183 days of it; a power that needs anyone else's consent, such as an independent trustee's or protector's, does not count.^275,276 Once the exception fails for a year it is lost for good.²⁷⁷ Separately, a portion already treated as owned under §676, or under §677 other than its life insurance rule, on September 19, 1995 keeps that owner for the property it held that day, for as long as it stays so treated.²⁷⁸ A U.S. settlor of a trust with no U.S. beneficiary can still be owner under another rule, for example by keeping a power to take the property back,²⁶⁵ and a U.S. beneficiary who alone can take the property is owner of it.^279,266