Not sure I follow…renting in France someone else property…while renting in UK your property…makes the UK property the official second home so liable to CGT in UK and not in France.
Will def seek more then one official opinion…I think its such grey area and I see and read a lot of confusion.
thx
Hi larkswood, just replying to your last questions…finally the french lawyer in Paris answered my last questions…thats her reply on cgt on a uk rented property while you live in France 
“UK source real estate capital gains received by a French tax resident are taxable in France and in the UK. In order to avoid a double-taxation on the income, article 6 of the UK/France tax treaty states that you will be granted a tax credit equals to the tax you should have paid in France on this income. Thus no taxation but will be taken into account in your income tax rate”
Hi Pat,
Many thanks for coming back - remember I’m not any trained expert, it does seem to me your lawyer has conflated the tax credit treatment of e.g. UK taxed pension, with UK CGT and treated them the same, whereas they are different. I wondered this when Article 6(?) was mentioned instead of Article 14 - CGT.
I’m very aware there is always a human desire to hold to the advice which really suits us and appears to help further our goals - I think it is a good practice though to ask ‘how would the other side see this’ or ‘what are the potential negative findings’ which could be made in a case.
If I may be so bold to offer, here it would be, be prepared for a situation where you do pay french CGT, the pain ameliorated by the UK CGT one definitely has to stump up. Of course, when you sally forth armed with your accountants opinion into the friendly france tax inspector’s den I hope your lawyer will prevail!
Sadly there seems to be a dearth on SF of people saying “yes they accepted that” etc, though at the end of the day I suspect it might be down to what box on the return you can put the gain in - and there’s an idea, why not ask your lawyer what boxes you would fill in and test the scenario on the France tax simulator?
And my lesson(s) learned from the thread - yes, get second opinions, then third opinions, don’t trust any one lawyer, and budget for the worst case scenario!
All the best and once again, thanks for taking the time to check with your advisor. My original reading of the DTT replicated below.
not quite… that is the same wording for income tax too which was modified by Gordon Brown in his day.
What it actually means is contained in the earlier words:
If the tax you would have paid in France is greater, then you will pay the difference but you will not receive a refund from HMG in the event it is the other way about.
Semantics perhaps, but there is an important difference and many misunderstand this rule thinking they are exempt from French tax as a consequence of the DTT, whereas in truth, this is not the case.
2 Likes
Can I just remind folk…
re your Worldwide Income… on your French Declaration…
If you have omitted something … or made a mistake … or whatever…
anything to do with Income… do take your courage in both hands and tell the Impots folk.
They are not ogres and will help you through the mire… and safely out the other side.
1 Like
and to reinforce the point made by @Stella the window for making changes to your tax submission for 2020 is now open (since 4th August 2021). This post in the Tax 2021 topic tells you how.
That’s what I thought Graham…so renting my house in uk for 2 years…reasons…( to avoid 10k bank penalty first as Im stuck on a fix rate for another 2 years and also to make sure we want to live again in France for the rest of our days…after we sell there is no going back as we would never be able to afford the house again in UK ) seems the difference will be will be expensive as our property has already generate 200k in profit. In UK the CGT won’t be much as we lived for 8 years as a main residence and if we rent it for 2 well my accountant said we will be charged only for that 2 years (based on 80/20 calculation we will be charged CGT on 40k) mines 12.500 allowance x 2 .
The relief in France will be 6% each years from year 6 so in our case will be 30% ( owned the house for 10 years in total for the French system…sadly they do not take into account the year we lived as a main residence) reduction on CGT in France plus another reduction for social charges around 8.25%.
If Im not wrong we would still have to pay around 25 thousand euro if not more with social charges… even after receiving a tax credit for what we paid in UK…I hope Im wrong but not sure the best solution
thx
1 Like
Any chance of living in the UK house, making it your main residence for 12 months then selling it… CGT free… or don’t you have a 10 year Carte de Sejour which allows you out of France for that long…
I do know folk who moved out of their main home and into their gîte (in the next village) for 12 months for just this reason … it was a few years ago, so no idea if it’s possible nowadays.
Thx for your reply Sunbeam…well w do not need a carte de sejour as we both have european passports…we want to move to France next summer so I didnt quite understand when you said …" living in the UK house, making it your main residence for 12 months then selling it"…we are currently living in our UK property
thx
Ah… sorry… didn’t have the full gist of your situation. Thought you were already in France and selling later in UK…
We sold before we moved so had no problems…
Hope you get sorted.
Thats ok…well that will be the scenario …being in France by next summer and sell our UK property at later stage …seems like not a good idea
Thx for your last reply…just wondering since I started this complicated topic discussion…did you assume I will buy a property to live in France when I will move next year and rent my house in Uk ?
If I rent a place in France …does my UK home will become a secondary residence ?
thx
I never assume anything 
for whose purposes? France or UK tax purposes? Length of stay - so many variables it’s not possible to be specific at this point.
France tax purpose…so going to France next summer permanently with my partner by renting a french flat and at the same time renting our UK property for about 2 years to avoid early fees mortgage penalty.
Then my idea is to sell the UK property and use the money to purchase one in France
We have European passports but dont think makes any difference
Thx
it does in respect to your ability to remain in France with FOM, of course - lucky you!
Does this reference help?
lol i do not understand FOM…so sorry…so based on my scenario will I pay CGT in France ?
Thank you
wow - this is still going!
@Pat99 - I recall you recently posted you are EU citizens! So if you have done the UK version of the WA which I have in France, you can happily be UK tax resident - declare your centre of interests is UK, have a France property, rented or purchased, don’t ‘live’ in it > 183 days / year (your EU passport is not going to be stamped - no schengen requirement) - you have emergency health cover, and visits to the doc will be 25 euro - won’t break the bank? - or do private with the CGT savings?
Just stay UK tax citizens till you make up your mind? I’ve read here loads of UK citizens stay in France or 9 months or permanently, never register with tax authorities.
Not condoned! Though surely you could decide where you want to live without spending an uninterrupted year in it - visits back to plague island will help you compare!
Hope I’ve got the right smielly thing this time…
lol i knowwww…I have to live in a rented French property lol
thx for taking the time to reply once again…so kind…but my French girlfriend will be working in France
Freedom of Movement… one of the important aspects of being a citizen of Europe (which sadly us Brits are now denied).
I think @larkswood12 has answered your other point. If you rent out the UK property, you will pay tax on rentals you receive in UK AFAIK
Another reference to consider concerning CGT.