Foreign Exchange - UK Daily Update - Written by laura on Tuesday, November 24, 2009 6:25 - 1 Comment
Thinking of selling your house in France?
For guidance with this and all aspects of your sale contact Heslop & Platt – Solicitors & French Law specialists: 0845 555 6545
If you are resident in the UK and your French house is not your main residence for tax purposes, the issue of capital gains tax in France needs to be considered.
The good news is that if you have owned the French property for more than 15 years you will be exempt from paying any capital gains tax in France when you sell, regardless of whether the house is your main residence or has throughout the 15 year period been a holiday home.
The next piece of good news is that provided the sale price agreed by you does not exceed €150,000, the notary whom you instruct to handle the sale, will deal with the capital gains tax calculation and submit the requisite tax declaration on your behalf.
However, should you be deemed a non-French resident, are selling for more than €150,000 and have owned the property for less than 15 years, you are required to appoint a tax representative to calculate the potential capital gains tax liability and lodge the tax declaration on your behalf.
There are a number of companies who have accredited status from the French Ministry of Finance and who, for a fee, will act as your tax representative. Their fees are in the region of 1% of the sale price. However where the calculation shows there will be no tax to pay their fee is normally discounted to approximately 0.67% of the sale price.
The tax representative guarantees that the tax calculation is correct and provides the client with an indemnity which means that if the Tax Authority was to challenge the calculation, which it is entitled to do for a period of up to four years from completion of the sale, the tax representative would be required to resolve the matter and pay any extra tax due plus interest and penalties. This is why their fees are set at the level indicated.
Though not particularly common, it can come as quite a shock to clients who sell at a loss and then discover they have to pay fees of several thousand euros just for an official declaration confirming there is no tax to pay.
For guidance with this and all aspects of your sale contact Heslop & Platt – Solicitors & French Law solicitors: 0845 555 6545
Interesting article. What if
- non- French resident
- property worth over €150K BUT
- house owned more than15 years?
= tax authority unlikely to challenge?
= seller can supply copies of original purchase document to counter claim?
Regards,