Which assets of a trust are subject to wealth tax?

A married couple had filed an application for tax regularization under the ISF in order to regularize their ownership of assets held through a family foundation governed by Swiss law.

Following this filing,administration issued a reassessment proposal specifically reassessment proposal the assets held in this foundation, which they considered to be a trust.

However, the couple challenged this tax assessment all the way to the Court of Cassation.

The question specifically concerned which assets of the trust should be included in the taxpayers' wealth tax base.

The Court of Cassation, citing the case law of the Constitutional Council, first clarifies that only those assets of the trust that give rise to a taxpayer’s ability to pay are subject to taxation.

In this specific case, the Court notes that the taxpayers “had access to funds from the foundation beginning in November 2005 for cash flow purposes, and it has not been established that these funds were used for the foundation’s purposes; from this, the Court concludes that the funds provided the taxpayers with the means to pay taxes.”

It further specifies that, since the trust’s assets confer a capacity to pay tax on the taxpayers, the wealth tax is assessed on all of the trust’s assets, regardless of whether or not the taxpayers have had access to them.

The tax assessment is therefore confirmed.

Commercial Court of Cassation, May 28, 2026, No. 25-12.326, published

This legal watch provided by Mispelon Avocat, a law firm specializing in French tax audit and French tax litigation. You can stay legal watch subscribing to the newsletter via this link.