I have a simple question regarding capital gains tax being levied on the sale of our primary residence which is here in France.
We considering selling here and relocating back to UK to a flat we own (and have been renting out) until we buy a house in the uk. Can anybody tell me with a good degree of certainty whether capital gains would be levied on our property here because we have the flat in the UK even though it is clear that it is our house here (and in which we have lived for seven years) which has been our principle residence. I know we wouldn’t pay CG if we had no flat in Uk, but could the french authorities maintain tax was due because of the flat?..We are french tax payers and have WA carte sejours. Or can anybody recommend who I could contact to get a definitive answer.
We have rental properties in the UK and when we sold our primary residence in France three years ago the Notaire wasn’t interested in them so they’ll be no CGT to pay.
Like @tim17 we have UK rental properties and moved back to the Uk 4 months ago.
No capital gains tax is payable when selling your principal residence.
Be aware that its best to sell your principal residence before buying your new principal residence, if not it does temporarily cost more in tax.
Once sold in France, when you return to UK you are classed as non resident and will pay extra stamp duty on your new principal residence purchase. The extra tax can be reclaimed after 6 months of UK residency. Tim has posted previously that the reclaim process is staright forward, I will hopefully confirm that in 2 months!
The extra stamp duty is certanly worth calculating into you budget as it can be significant.
If we move into the flat (tenant will have been given the 4 months notice as per the new 1st May Rental Act) and in due course sell the flat as (but before) we complete on our house why would additional stamp duty be due? Surely no diffetent to a person in rented accomodation then buying a place?
Your only CGT issues that I can see would be if you don’t sell fairly quickly (hopefully academic!).. France will informally treat the gain as exempt if you sell by the end of the following year after you leave the property, provided it hasn’t been let out in the interim. The UK will let you have the last 9 months of ownership as exempt if it’s been your main residence at some point.
The key is that you need to have sold your principal residence before buying your next principal residence.
Yes you can move into the flat you already own and if you live there for more than 6 months and claim it as your new principal residence you would be UK resident and not subject to the non resident surcharge but, you would have to sell what is now your principal residence before you bought your next one or get caught for extra stamp duty.
Have a look here Stamp Duty Land Tax: Residential property rates - GOV.UK
Put in your situation and the site will tell you all you need to know.
Agree … up to the end of the next tax year I think for France providing you dont put tenants in the house.
Is there a risk though of being caught by the fiscal representative requirement regardless as a non dom? They will take anyway a small amount of the sales price.
For the uk again provided it was the principal private residence all the time no cgt. If it wasnt a bit more complex…but there are legal ways not to pay if you were french resident for a long time.
Hello, I’ve done as you suggested and depending on the purchase price we have in mind we will have to find an additional £6-8k and then reclaim it once we have been back six months……that’s assuming we buy before six months is up. A tax implications I was not aware of so thanks very for that info as forewarned is forearmed.
Fairly sure CGT is payable on a second home in France but not the primary residence in France.
Ours is purely a second home so would have to pay CGT on a sliding scale based upon years of ownership. Then we would also have to pay CGT in the UK too on the difference in price between when we bought and when we sold. Sneakily too the amount charged is on the going rate at the time of purchase and selling. The euro has changed a lot in the intervening years.
Paul we bought our house just as the change to euros was happening. At the time the balance of euros to the ÂŁ was in our favour but has changed a lot since then over the years.
The UK taxman uses the value of the ÂŁ to the euro at each time of the purchase and the sale So there is quite a difference in values.