Hi I’m resident in France and I remember reading about a 6 year limit to pass to not pay a certain tax but my memory is not that good that I remember if it was cgt, giving a gift …… I have some friends who will have to return to uk for family reasons and I mentioned this and of course they want to know what it is for, as do I.
Am I just remembering the basics of the article totally wrong ? Has anyone else any idea of what I am trying to find?
You may be thinking of the UK inheritance tax rule that says that for any gifts over the value of £3000 pa, seven years must expire after the date of the gift for no IHT to be payable.
If the donor dies die during the seven year period I think there is a sliding scale of IHT that the recipients have to pay.
This of course assumes that your estate is liable for UK Inheritance Tax in the first place - broadly speaking it needs to be worth more than half a million quid (assuming your friends leave it to their children). An estate left to a spouse or to charity does not attract IHT and their unused IHT allowance can be passed on to the surviving spouse.
So your friends need to tot up what they are worth and look at who they plan to leave (or give) their estate to and compare that to UK IHT allowances - there may be nothing to worry about, as most people’s estates are not worth enough for UK IHT to kick in.
|How Inheritance Tax works: thresholds, rules and allowances: Overview - GOV.UK
Of course I am not a tax lawyer so they should take proper financial advice.
This may be useful for them >>
Is this perhaps what you were thinking of:
“If you’re returning to the UK within five years, income made from wages abroad won’t be taxed, just income made from investments and other assets. You should plan to file a tax return if your foreign income is above £300, or if you have any other income to report (salary, dividends, etc.). The UK tax year goes from early April 6 to April 5 of the following year. If you were abroad less than a full tax year, you’ll still pay UK tax on foreign income for the duration of time you were away.”
Temporary non residence - also for pensions
and here’s one for CGT
Hi everyone thank you for your comments but I’m afraid it’s non of those points.
The uk inheritance tax we know about that and they have already done that a few years ago and know most of gov uk advice on returning to uk permanently.
I am just so annoyed with myself for not saving the item but I will not be going back to uk so I didn’t really take much notice of the details. It was certainly ex pats returning to uk and they did not have to pay this thing (that I took notice of) if they stayed in uk beyond 6 years.
Sorry that it is so vague,I have tried searching online over several sites but no success. What I am sure of is that I did read or rather glance at it and I was surprised as I had never heard about it. Think in looking for ‘a needle in a haystack ‘
Isn’t that for Australians?
Hi thank you Helenochka I’m afraid it is not that . I came across that during my general ‘6 year’ search and found that for Aus.
I think I’ve found it the French Exit Tax .
That’s only going to affect your friends if they are seriously wealthy though:
Hold assets worth less than €2.57 million for more than 2 years? You’re exempt.
Yes they are. Just so pleased to have found it,
I think as I don’t have anything like that amount nor will I leave France , that is probably why I didn’t take much notice of it.
Well remembered!
I hope your friends will consider obtaining appropriate tax advice to assess whether this exit charge could possibly apply to taxpayers moving to the UK. There is a UK/France tax treaty precisely to prevent double taxation on gains from assets etc.
Caveat - this is not something I’ve researched or considered in any depth, but I would be extremely surprised if the exit tax applied in those circumstances. Indeed the article alludes to the possibility of treaties avoiding the charge.I’m happy to stand corrected but I can’t see any references to exit taxes in the UK/France treaty.
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Just a note here… there were lots of changes in the autumn statement to non dom rules. It may include British nationals that have spent time overseas. They could qualify for foreign income gains relief. This will mean they could wait until they get to the uk and then sell non UK assets and not be subject to CGT. Also for inheritance tax assets outside the uk may not fall into the estate in the uk. They need some careful repatriation planning to asses each asset and all the rules. The finance bill hasn’t been ratified and is still at report stage so it would depend on timeline etc.
Thank you George1 and Dave Lawson .
They will be returning in 2 years so have time to organise their financial situation with advice from tax experts in France and uk.
I just remember that when I glanced through the article bring surprised at the tax and now my friends will not have a complete shock of its existence when they leave in the future. Your comments are much appreciated.
It sounds like they can afford to pay for proper advice in any case, and would be foolish not to. 
Yes they definitely can and will take advice.
Thank you everyone for your comments.
This site is so useful and friendly .
An addition to my original query…. I was lunching with these friends along with another person who is having to return to look after elderly parents and feels she needs to sell her house in France.
When talking about the tax this person looked shocked and asked if she will have to pay any taxes when she sells her house and permanently returns to uk with the proceeds of her sale. Said her house would probably sell €240-€260k obviously solicitors need payment.
This was something none of us could answer as we didn’t know.
Others more knowledgeable will no doubt comment, but I believe if it’s her primary residence and she is still officially resident at the time of the sale, then it would be exempt from Capital Gains Tax.
If she were to move to the UK first and then sell it, then it becomes a maison secondaire
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That’s what we assumed, she’s resident in France and house is main residence so no cgt.
She will sell before she goes back (hope she can sell it quickly) as feels she can’t keep it going once she goes back.
She just wants to be able to transfer her house sale funds to uk knowing there are no surprises she might have to pay.
