You should be able to argue that you are exempt from all but the prélèvement social so only pay 7.5% not 17.2%. I don’t know whether CPAM does an attestation to confirm you are not covered by them, or whether your PHI certificate will be sufficient.
It’s rarely worth skipping a form where one exists.
Edit, just realised that you work in France, so they may not accept that you are not part of French SS system as will be eligible for things like redundancy etc. Still worth a try tho.
The plunging £ since 2015 should also help wipe out any gains when you do the exchange conversions.
What bothers me about this form is that it clearly states it’s intended for notaries. I know John completed his himself and the fisc accepted it but - in my experience - different tax offices often take different views. I can fully imagine the Strasbourg office insisting I get a notary.
Although there is a line where you can claim a tax credit for CGT paid abroad, the form is very much geared towards property sales in France. It asks for the buyer’s details and wants to know what fees and levies were paid by the buyer.
Am so fed up with paperwork.
Yes, we know as we sold a property last year needing this form. But as ever in France as JoCo states other things may be possible as offices will vary. Nothing ventured, nothing gained?
Ours was complicated and we had a battle royale with a notaire who was insisting - incorrectly- that we used and paid for SAFER so we crawled over that form with him endlessly. But in France so we had to use a notaire. As you are just reporting a gain from a sale overseas they are likely to be far more relaxed about it,
Hi - the note about the Notaire is on the ministry download page for 2048-IMM-SD now. It was not there when I did it in 2019. There is also one reference to a Notaire in the Notes, but I cannot see any actual mention of Notaire on the form itself. You are required to pay the CGT within the month of sale, but I had to amend it later after discussion with the Impots, so I think as long as you put the best information you can, and pay a sum to start with, you should be able to amend it later. I would suggest sending a draft form to the Impots by email asap, explain that its the sale of a UK house, and ask for their response.
OK, I’ve just printed out form 2048 IMM SD, together with the guidance notes, and done a very rough draft. Bear in mind the house hasn’t been sold yet and I’m just trying to get an idea of what will be due to whom.
I’ve gone through each line and entered guesstimates for “frais et taxes supportes par le vendeur” (line 12) and “frais d’acquisition” (line 22, where they seem to give you a fixed allowance of 7.5%).
Then assumed “imposition a 19%”. And filled out the social charges section, with no “abattement” for length of ownership (we only bought the house in 2018).
Once I deduct the CGT that will - according to my calculations - be paid in the UK, the amount owing to the French tax office is actually negative.
Is that mathematically possible? Surely not…!
Interesting…Advance caveats that I don’t know (or need to know!) the figures involved nor am I familiar with the form. However setting aside whether ‘mechanically’ the form is producing a negative figure, from first (tax treaty) principles you clearly can only offset (ie credit) the UK CGT up to the amount of French tax due on the gain…As I’m sure you’re aware, if the UK CGT exceeds the French tax, France isn’t going to repay the excess (ie the negative amount per the form, if it’s the CGT that is the ‘culprit’ responsible for the negative figure).
As an aside, a lot of global tax planning involves driving down the higher country’s tax charge (probably the UK in this case) down to the level of the lower country’s (France’s) amount. The excess is a true global tax cost. I imagine you’ve already looked hard at this but I wonder if there are any other means of reducing your UK CGT charge (eg have you included all legitimate costs incurred during your ownership of the property etc)…
We’re talking about a very small house that was bought for £155,000 and will probably sell for £180 000. It was always a second home and owned only for 4 years so no French tax reductions for being a main residence or owned for a long period.
With HMRC, it’s fairly easy to determine what expenses can be set off against the CGT bill. I’ll check again what’s allowable but off the top of my head, I would think:
Purchase: surveyor’s fee, solicitor’s fee, stamp duty (?? can this be set off? Will find out).
Sale: estate agent’s fee, solicitor’s fee.
But with the French form, you have to refer to various pieces of legislation to see exactly what expenses - incurred at the time when the house was purchased and sold - are allowable.
For purchase-related expenses, you can either enter the actual figure or have them apply a fixed 7.5% allowance.
Will double check my figures. Maybe I’ve miscalculated somewhere.
I suspect it’s probably quite common that the UK CGT exceeds the French charge - there are such relatively generous standard % deductions in France, some of which you mentioned, that just don’t have UK equivalents.
Thanks for your help George.
I’ll look into it in more detail (having to refer to all this supporting legislation makes it a rather byzantine process) and report back.
I’ve run the figures again and it is definitely this rather generous standard deduction of 7.5% of the purchase price for “frais d’acquisition” (Line 22 of the form) that is bringing the French tax charge right down.
Do you reckon you’re allowed to claim that 7.5% standard allowance, even if your actual costs were less than that?
Certainly if you opt to enter your actual figures, you have to be able to back them up with justifcatifs.
But the guidance notes read:
“Les frais d’acquisition à titre onéreux sont définis par décret (CGI, art. 150 VB, II-3° et CGI, ann. III, art. 41 duovicies I,
2°). Ils sont retenus soit pour leur montant réel sur justification, soit forfaitairement pour 7,5 % du prix d’acquisition.
Les justificatifs sont fournis par le contribuable sur demande de l’administration.”
This last bit makes me think you have to be able to back up your figures whichever option you go for. So perhaps safer for me to enter the actual figure, which will be considerably less than 7.5% of the purchase price.
forfaitairement or forfait = flat rate and chooseable vs real costs or eligible as a deduction in other parts of French tax law regardless of whether the deduction exceeds the actual costs.
George1’s instincts would always be correct but in this case I’d not even think of doing anything other than the 7.5% forfaitary reduction. It’s put there by the French Impôts in the full knowledge that some people’s offsettable expenses will be less so they’ll claim it. And if someone has offsettable expenses that exceed the 7.5% then of course they’ll claim and prove those expenses instead. All as set up by France Impôts.