FRENCH CAPITAL GAINS TAX SERVICE : CHARLES HAMER'S FINANCIAL SERVICES ROLE IN THE FRENCH PROPERTY SALES PROCESS
WHY USE CHARLES HAMER’S SERVICES?
A few working examples of how Charles Hamer's input saved our clients money
Client Mr & Mrs W - Wrong Legislation
After a major fire that destroyed the original property, our clients purchased the land via an SCI and completed the construction of a new chalet, before arranging for its sale at the end of 2014. A substantial project - the sale price exceeded 900.000€ - the notaire and their fiscal representative initially calculated a French capital gains tax liability of over 177.000€. Our analysis of the file revealed that the notaire had misinterpreted the project and applied the wrong legislation to the calculations. Working with one of our own correspondant fiscal representatives who agreed with our conclusions, the final declaration revealed French tax payable of just 36.500€.
In this case, we managed to save our client 140.815€ against the initial calculation
Client Mr N - Available Exemption not Applied
Purchased a property in the 1988 before eventually selling it for €240.000 in 2012. Using the February 2012 taper relief rules, the fiscal representative, appointed by the notaire, calculated a tax liability of €14.855 albeit subject to an additional €5.900 being sequestered by them for 4 years as surety against a tax office verification due to insufficient documentation being available to justify the cost of a swimming pool installation. On behalf of the client we successfully appealed the liability on the basis that, despite him having been UK tax resident for several years leading up to the sale, the use of the property by the client qualified him for total CGT exemption. This therefore resulted in a French tax saving of €14.855 plus interest and recovery of the €5.900 sequestered sum.
Our input therefore achieved a total benefit to the client of over €20.750.
Client Mr & Mrs F - Wrong Interpretation of Improvement Works
Purchased a small chalet and sold it many years later for €467.500, realising a substantial gain. During their period of ownership they had carried out various modest works. The fiscal representative appointed by the notaire disallowed such works having determined that they were categorised as maintenance, repair and replacement. On the client agreeing instead to appoint our correspondent fiscal representative, after obtaining additional documentation we successfully argued that such works constituted improvements and thus qualified for deduction.
This resulted in French tax savings to the client of almost €6.300.
Client Mr B - Missing Supporting Paperwork
Purchased land and constructed a villa before selling at a price of €825.000 and generating a substantial gain. Based on the information and documentation supplied, the fiscal representative calculated a liability of just over €87.250, after rejecting certain client claims of additional expenditure including invoices incurred in the UK. By referring to the documentation, the details of the relevant legislation and obtaining additional paperwork we successfully negotiated this liability down to just under €49.000.
A saving to the client was generated of €38.250.
Client Company D - Wrong Rules Applied
Owned the French property by means of an SCI subsidiary of a UK Ltd company. The SCI sold the property in June 2010 for €490.000 some years after completing major works on the property The fiscal representative appointed by the notaire claimed a liability of just over €63.000 which was deducted from the sales proceeds. On behalf of the client Charles Hamer successfully appealed to the French tax office on the basis that the wrong rules were applied when calculating the gain.
We were able to recover just over €35.400, including interest for our client.
Client Company B - Recovering Excess Tax at Source
Owned by means of a UK Ltd company since 1982, the company sold the property in September 2013 for just under €540.000. Despite having been owned for more than 30 years, because of rules specific to commercial company ownership the sale was not tax exempt. Instead a tax levy at source was applied to a gain calculated on a depreciated book value - according to French base corporation tax rules - amounting to more than 160.000€. Working with the company's French accountant, we successfully incorporated the sales transaction as part of normal business operations, treating the 160.000€ as a credit against French corporation tax due for that trading year and claiming back the excess.
As a result of following this procedure in the correct manner we recovered 124.223€ for our clients
Please do not hesitate to contact our advising partner Jonathan Pawsey by email(Jon@charleshamer.co.uk) telephone (+44) 01844 218956, or his assistant Emilie Mengin (firstname.lastname@example.org).