As our relationship with EU countries changes post-Brexit, so to do our rights and responsibilities.
Hard on the heels of the news that Brits will only be able to spend 90 days out of every 6 months in the EU Schengen Zone, comes confirmation that UK residents with a second home in France will have to pay significantly more capital gains tax on property sales.
As the old dating cliché goes, we have moved from ‘in a relationship’ to ‘it’s complicated’.
Ahead of the introduction of the new system, we contacted interested clients with this excellent and well-informed article from Taxation, our industry publication specialising in tax law, practice and administration. For almost a century, Taxation has been the go to guide for accountants and finance professionals with a recent issue carrying this article from Paula Sparrow, Tax Director here at Butt Miller.
For property sales in France, not just CGT but also social charges should be considered making the rather stark ‘bottom-line’ that the sale of your French property could attract a levy of 36.2% of any profit made on the sale.
There are exemptions, properties that have been owned for more than 30 years or sell for less than 150,000 Euro are not subject to either CGT or social charges, and as ever it pays to take expert advice.
Once you have tackled the French system there may also be reporting requirements in the UK, but we are of course on hand to guide you through the minefield that overseas property has suddenly become.
One final consideration, the appointment of a fiscal tax representative is now compulsory and all capital gains declarations must be supported by a representative accredited by the French Tax Authority… adding in the region of a further 1% of the property value to your final bill.
It is indeed complicated, but as ever, we are here to keep you informed, offer help and point you in the right direction. You can read the original article from Taxation here and see other blogs, factsheets and client stories on the Insights page of our website.