Capital gains tax

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Capital gains tax


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Old 31st May 2020, 04:29 PM
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Default Capital gains tax

Hi,

Wonder if someone can help me, I've been researching this but can't seem to come up with a straight forward answer! My partner & myself have just put our properties on the market here in the UK & in the current climate have absolutely no idea how long they will take to sell. We are mindful of the urgency of moving to France before the end of the year. If we come over to France, lets say November this year, that obviously depends on whether restrictions have been lifted & rent for a year but hold off on applying for residency (as we have up until July 2021), would we have to pay Capital gains tax in France when we sell our UK homes if we are not French residents?

Thank you

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Old 31st May 2020, 04:55 PM
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I will certainly defer to anyone else here with some actual experience in the matter, but my understanding is that in France you don't pay capital gains tax on the sale of your personal residence. And I believe that applies even if the personal residence is abroad.

But hey, gang, please jump in here and correct me if I'm mistaken on this one. (We do get this question pretty frequently.)

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Old 31st May 2020, 05:08 PM
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It will be covered in the tax agreement between the UK and France, but IIRC CGT would not apply in France. It is Spain where you get caught out on this.

My understanding is that if you stay in France for a year, or indeed more than 6 months, you would be considered tax resident in France, even if you rent and your principal residence is in the UK, because France would be considered your normal place of residence. What's more it is likely that it was your intention to remain (as indeed it appears to be). However, if I am correct in my recollections that CGT would not be applicable, that doesn't really disadvantage you.

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Old 31st May 2020, 06:10 PM
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Do not confuse being allowed to live in France and being tax resident As has already been explained once you move permanently to France you will come under the French tax regime However taxes on real property eg land housing etc is normally subject to taxation in the country where the property is based Therefore initially if you make a profit on the sale of the house in the UK it will no longer be regarded as your first house by HMRC so will be subject to CGT if applicable in the UK Howver you may need to declare this in France when you do a tax return but I would suggest you get professional advice I would also add a caveat-do not sell your house in the UK if you can avoid it This is because you will need to have an income to be allowed to stay in France plus if it does go to pear shaped fpr whatever reason at least you will have somewhere to move back too
You also mention a partner Be aware that French inheritance law and tax is not partner friendly
This website will help re tax and succession https://www.notaires.fr/en

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