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CGT in France and in the UK
 Poster: A snowHead
Poster: A snowHead

OK... so please be kind with me on this as I know this is a topic that has probably been talked about for ages... However, I am BAD at understanding tax so would it be possible for someone to explain to me, in simpleton terms, about this subject matter... Essentially...

... If I was to purchase an apartment in France, and decided to rent it out occasionally, What tax would I be liable for?
... If I sold the apartment in time, What tax would I be liable for?
... Do you have to pay tax in both countries on your earnings/CGT.

I know there is a limit on around £10k in the UK, before you have to pay CGT but wondered what the deal was in France...

I hope this iss straight forward to explain, otherwise I might just go and stick my head in a very hot oven... Puzzled Puzzled Puzzled Puzzled Puzzled Puzzled Puzzled

Thank you VERY much in advance...
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 Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person

AlpineAddict, worm...can...opener... I am not a lawyer of any description - this is based on limited experience - YMMV - you need a proper international tax accountant/lawyer to sort you out, etc.

Not so much the UK side as that's relatively straightforward I believe, in that there's a dual taxation treaty in place that I would anticipate means you only pay tax once, but at the higher rate of the two countries.

That is, let's say the UK charges 20% and the French charge 25%, there will be provision that you only pay 25% and the details of the treaty will dictate in what proportions where (this may mean that your UK allowance is meaningless). But there are still complications. This also will broadly apply to income.

The French however, in their indomitable fashion make the whole thing eye-wateringly difficult to understand.

You need to consider such as possible inheritance complications (Napoleonic inheritance is just stupid) and so whether you'd need/want to buy anything through a shell.

Which may or may not have implications on local social security, which at the very least will be tedious and time consuming and potentially quite costly. There are also "semi-professional" (?) categories of business that give some advantages but require a certain proportion of commercial lettings (I don't know a lot about this I think it's fairly new).

French CGT does have some sort of provision to reduce over 30 years after year 6 (I think). So you want to consider the long term.

Lots of fun.

Someone who knows more than may will probably be along shortly snowHead snowHead
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 Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?

AlpineAddict, Sand - Head - Bury wink
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 You need to Login to know who's really who.
You need to Login to know who's really who.

under a new name, Ta very much for that mate....

Boredsurfing, ... is that how you get by??? Smile
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 Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.

AlpineAddict, Don't get me wrong though, we own in France and run it as a business but were staggeringly badly advised at the beginning which has cost us...

As far as I can determine, most accountants in France, even in very multi jurisdiction areas (e.g. Morzine, Chamonix, etc.) don't really understand the admittedly frighteningly complex tax code. Let alone social security whose preferred polic in cases of doubt is to make it up, extract the money from your bank account (yes, they can do that with terrifying ease) and then leave it up to you to prove that they were in error.

As for changing address? I reckon the main reason that so many of the French population work so much on the black is that it would be too expensive to send enough register letters for the authorities to actually acknowledge that you have changed address that it's economically stupid to even try.
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 You'll need to Register first of course.
You'll need to Register first of course.

AlpineAddict, take comfort from the fact that history suggests it's actually quite difficult to make enough capital gains on French property to be worrying about CGT. wink
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 Then you can post your own questions or snow reports...
Then you can post your own questions or snow reports...

UK CGT remember also takes into account any foreign exchange movements.

So buy for €100 when that is £80, and sell for €100 when that is £100 and you have made a UK capital gain of £20.

If it is your second home - i.e. you don't let it out - then you should elect for it to be your PPR for a short period, which will reduce the UK CGT by making the last three years tax free.


If you keep the French property for (apparently now) 15 years, then I am led to believe that it becomes French CGT free.

http://www.french-property.com/guides/france/finance-taxation/taxation/capital-gains-tax/rate/


Beware potential things like wealth tax, and the socialist government that is making it almost impossible to exist there...
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 After all it is free Go on u know u want to!
After all it is free Go on u know u want to!

James the Last wrote:
UK CGT remember also takes into account any foreign exchange movements.

So buy for €100 when that is £80, and sell for €100 when that is £100 and you have made a UK capital gain of £20.

If it is your second home - i.e. you don't let it out - then you should elect for it to be your PPR for a short period, which will reduce the UK CGT by making the last three years tax free.


If you keep the French property for (apparently now) 15 years, then I am led to believe that it becomes French CGT free.

http://www.french-property.com/guides/france/finance-taxation/taxation/capital-gains-tax/rate/


Beware potential things like wealth tax, and the socialist government that is making it almost impossible to exist there...


Sadly not right vs 15 years. Your French cgt liability now starts to reduce in year 6 over 30 years...
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 You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.

If you're a UK resident, your overseas assets are also liable to CGT....

http://www.hmrc.gov.uk/cgt/intro/when-to-pay.htm
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