French Capital Gains Tax Reform
Take a look at the latest news bulletins on French capital gains tax using the links below :
BREAKING NEWS : Please refer to our latest bulletin with regards to the BREXIT: CHFS BREXIT BULLETIN
SEE OUR SUMMARY OF PAST BULLETINS HERE :
CHFS BULLETIN DECEMBER 2015 : PRLEVEMENTS SOCIAUX : YET MORE DEVELOPMENTS VIA THE 'LOI DE FINANCEMENT DE LA SECURITE SOCIALE 2016'.
CHFS BULLETIN NOVEMBER 2015 : PRLEVEMENTS SOCIAUX : JOY AT LAST BUT WILL IT BE SHORTLIVED ?
CHFS BULLETIN AUGUST 2015 : PRLEVEMENTS SOCIAUX : HAVE WE NOW REACHED A CONCLUSION ? - Have also a look on the Conseil d’Etat decision no. 334551 of 27 Juillet 2015 (French version)
CHFS BULLETIN JUNE 2015 : APPEALING THE PRELEVEMENTS SOCIAUX : TIMETABLING THE RECOVERY OF PRELEVEMENTS SOCIAUX.
CHFS BULLETIN MARCH 2015 : APPEALING THE PRELEVEMENTS SOCIAUX : ECJ's DECISION. - Have also a look on the ECJ DECISION CURIA-C 623.13
CHFS BULLETIN DECEMBER 2014 : APPEALING THE PRELEVEMENTS SOCIAUX.
CHFS BULLETIN NOVEMBER 2014 : PRELEVEMENTS SOCIAUX - ADVOCATE GENERAL OPINION PUBLISHED.
CHFS BULLETIN OCT 2013 : PRELEVEMENTS SOCIAUX DEVELOPMENTS.
CHFS BULLETIN JULY 2013 : PROJET LOI DE FINANCES 2014 & CGT: MORE FRENCH CGT REFORM ON THE WAY PART 2.
CHFS BULLETIN JUNE 2013 : PROJET LOI DE FINANCES 2014 & CGT: MORE FRENCH CGT REFORM ON THE WAY.
CHARLES HAMER'S FINANCIAL SERVICES ROLE IN THE SALES PROCESS
If you are lucky enough, the sale of your French property will result in you realising a gain on your investment. The downside to this is that the gain will normally be assessable to tax in France and again in the UK if you are UK resident.
Until recently, it was often the case that the French tax payable fell below the corresponding UK tax due and, being available as a credit to offset against UK Capital Gains Tax (CGT), in the wider scheme of things the amount of French tax actually paid wasn’t so much of a concern.
With the hike in the French tax rates which took place in August 2012 and January 2013 and the reduced taper relief effective from February 2012, this is no longer the case.
Consequently, there is now more of an ncentive than ever to work at minimising the French tax liability.
Whilst - since 01/01/2015 - the notaire is usually the one responsible for calculating the French tax due and submitting the tax return ("2048-IMM"), they don't have any incentive to ensure such tax is at a minimum. Meanwhile with fiscal representatives having held the calculation responsabilities from 2005 until the end of 2014, many notaires will not be familiar with rules particular to non-residents and will often not have the time or inclination to trawl properly through the reams of invoices and payment justifications needed for improvement works to be allowed as a deduction when calculating the gain.
Click here for a break down of the technical notes
In our experience, typically, the notaire will not:
- In the event that taper relief is insufficient - consider whether you qualify for one or other of the French CGT exemptions available.
- Liaise with you only in a cursory sense to help determine whether or not works done to the property are a deductible expense.
- When such works are potentially allowable, package the documentation needed to ensure that the cost of such works remains deductible by standing up to any tax office review of the file, post sale.
- Or even ensure that in the case of company ownership, that the correct CGT assessment regime is applied.
When selling your French property, it is therefore down to you to ensure you pay the minimum amount of French Capital Gains Tax (Plus-Values).
We are here to help you achieve the above by addressing each of the points raised along with others which may be relevant under current French legislation.
OUR SERVICES TO NON RESIDENTS - FRENCH TAX
On your behalf we will:
- Consider the relevance of available financial planning options prior to the sale which have the net result of reducing the overall CGT liability.
- Advise on how you can structure the sale price in the compromis de vente in a manner which reduces the CGT payable (If instructed early enough).
- Assess your situation to determine whether one or more French CGT exemptions may apply to you.
- Address the question as to whether or not any works you carried out on the property are of a nature which warrants a deduction.
- Help you to package the documentation required to meet the legislative requirements so that the cost of such works are sufficiently justified and thus deductible from the gain
- Ensure that appropriate default revaluations to acquisition costs are applied
- If one is required, appoint one of our correspondent Fiscal Representatives who will levy a fee which is either at a discount or, at worst, no higher than that charged by the representative appointed by the Notaire.
We liaise to obtain all necessary information and documentation from the Notaire, yourselves and any third parties (such as building contractors, architects, valuers) necessary to minimise the CGT payable. We are then able to :
- Prepare the draft French CGT account.
- Liaise with the notaire for agreement to the final account, the payment of tax and receipt of the sale proceeds.
Examples of previous French Capital Gains Tax savings
PREPARING THE UK SELF ASSESSMENT CAPITAL GAINS TAX SUPPLEMENTARY RETURN.
You decide on the extent of our service. We can limit our involvement to dealing with the French tax declaration or include our service completing the UK self assessment return as well.
Our role for the UK assessment is to:
- Prepare the UK CGT account according to the UK tax calculation rules.
- Complete UK supplementary self-assessment forms disclosing the net tax payable in the UK, (or establishing a loss if relevant).
- Claim the tax credit for any tax payable in France to offset against any corresponding UK CGT.
It may be clear that a taxable gain will not arise in France or the UK. In such cases, opportunities exist to register the sale as a loss in the UK. These losses may be used to avoid UK Capital Gains Tax due on any other investments such as shares, unit trusts, other investment property, gifts, and also for Inheritance Tax planning.
Charles Hamer are available to draft a capital loss assessment to submit and be approved by the UK tax office, for such use.
FRENCH TAX APPEALS
You may have already sold the French property and paid the tax due, as assessed by the fiscal representative or the notaire, but have concerns that you may have overpaid.
If the sale took place less than 3 years ago* , we are able to:
- Check the paperwork to ensure you have paid the correct amount of tax and
- If you have overpaid French tax, draw up and pursue an appeal on your behalf, in the event that the amount recoverable is worthwhile.
*An appeal may be made at any time up to the 31st December 2 years following the year of the sale.
WHY USE CHARLES HAMER'S SERVICES ?
The purpose of our service is to provide both value for money and peace of mind.
Not only is there the potential for a discount on your fiscal rep. fees, but the trust invested in us could save you £1000's in CGT payments and put you at ease when selling your French property.
Examples of previous French capital gains tax savings
How to Proceed
Having reviewed the services that are available the next stage of the process requires more information from you to allow us to make an accurate assessment of any liability due in France and the UK.
In order to do this, please complete our questionnaire and return it via email to either Jon Pawsey (Jon@charleshamer.co.uk) or Emilie Mengin (email@example.com)
If you have any further questions regarding our services or how to proceed, please don't hesitate to send an e-mail to Jon@charleshamer.co.uk or firstname.lastname@example.org, or call us directly on +44) 01844 218956